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Digitized by the Internet Archive 
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THE 

SCIENCE OF MANAGEMENT 



BY 

FREDERIC A. PARKHURST, M. E. 

// 

Organizing Engineer 



A Course of Lectures Given at 

Case School of Applied Science 
cleveland, ohio 

1917-1918 






Copyright, 1918 

BY 

FREDERIC A. PARKHURST 



JAN -5 1918 

©CI.A479917 



PREFACE 



The author feels that best results can be obtained from a 
course of lectures when the student has the advantage of a 
printed text to which he can refer as occasion requires 
This book has been prepared to give such an advantage to 
the students of Case School of Applied Science, 191 7-18, 
who are attending the course upon "The Science of Man- 
agement." It contains the necessary chapters from the 
various books on the allied integral parts of the subject 
and with "Applied Methods of Scientific Management," re- 
quired for the course, completes the text for the entire 
thirty lectures. 

The Author. 



TABLE OF CONTENTS 



LECTURE I 

History 1 

1-A. History of the Science of Management 2 

1-B. Bibliography 10 

LECTURE II 
Fundamentals; Practice vs. Theory in the Science of Management 21 

LECTURE III 

Fundamentals ; Practice vs. Theory in the Science of Management 

(Continued) 32 

LECTURE IV 

"Put Your House in Order" 42 

A Discussion of the Responsibilities of both the Owner and 
the Engineer 42 

LECTURE V 

First Essentials (Chapter I of text) 53 

1-A. Preliminary Investigation 53 

1- B . The Form of Organization 53 

1- C . The Organization Record 53 

LECTURE VI 

Departmental Functions (Chapter II of text) 54 

2-A. Functions of the Sales Department and Counting Room 54 

2- B . Functions of the Engineering Room 54 

2- C . Functions of the Drafting Room 54 

LECTURE VII 

Drafting Room Methods (Appendix of text) 55 

VII. Drafting Room Instructions (Page 215) 55 

VIII. Instructions for Drawing and Sketch Indexes (Page 

223) 55 

XXXI. Shop and Drawing Boys' Instruction (Page 296) 55 

v 



LECTURE VIII 

PAGE 

Planning Room (Part of Chapter III of text) 56 

3- A. Planning Department 56 

3-B. Duties of the Superintendent 56 

3-C. Functions of the Planning Department 56 

3-D. The Production Clerk 56 

LECTURE IX 

Planning Room Instructions (Appendix of text) 57 

X. Production Clerk's Instructions (Page 231) 57 

XL Planning Department Monthly Report (Page 233) 57 

LECTURE X 

Planning Room, Continued (Part of Chapter III of text) 58 

3- E . The Shop Engineer 58 

3- F. The Stores Clerk 58 

3-G. The Cost Clerk 58 

3-H. The Route Clerk 58 

3- I . The Order-of-Work Clerk 58 

3- J . The Shipping Clerk 58 

3-K. The Receiving Clerk 58 

3-L. The Time Clerk 58 

3-M. The Schedule Clerk 58 

LECTURE XI 

Planning Room, Continued (Part of Chapter III of text) 59 

3-N. The Factory Mail System 59 

3-0. The Time Boy 59 

3- P . The Inspector 59 

3-Q. The Stores Keeper 59 

3-R. The Move Material Boss 59 

XXXI. Inspector's Instructions (Appendix, page 281). 59 

LECTURE XII 

Routing and Control of Work (Part of Chapter IV of text).... 60 

4-A. The Routing of Work Through the Shops 60 

4-B. Symbols (For further reference see "Symbols" pub- 
lished by the author in early 1917) 60 

LECTURE XIII 

Routing and Control of Work, Continued (Part of Chapter IV 

of text) 61 

4-C. The Functions of the Material Boss 61 

4-D. The Functions of the Order-of-Work Clerk 61 

4-E. Gang Bosses 61 

4-F. The Speed Boss 61 



LECTURE XIV 

PAGE 

Routing and Control of Work, Continued (Part of Appendix 

of text) 62 

XIV. Anticipating Requirements both as to Rough Material, 

Machining Operations and Assembly (Page 243).... 62 

XV. Order-of-VVork Clerk's Instructions (Page 246) 62 

XVI. Movement of Batches in Installments (Page 249) 62 

XVII. Route Rack Signals (Page 249) 62 

LECTURE XV 

Stores, Labor and Cost (Part of Chapter V of text) 63 

Note : The student is referred to the author's "Predetermina- 
tion of Prices" for a further insight into the controlling 
elements necessary in connection with costing. 
5- A. The Creation of a Stores Department, the Methods of 
Classifying and Housing all Material (Rough or 
Finished) not in Process of Manufacture, and the 
Ordering of Stores either to be Purchased Elsewhere 

or to be made in the Shops 63 

S-B. The Perpetual Inventory or Stores Ledger, Showing 
how it is Kept up to Date and Checked to Always 
Agree with the Actual Stock 63 

LECTURE XVI 

Stores, Labor and Cost, Continued (Part of Chapter V of text) . 64 

5-C. The Means used to get Correct Returns for all Times 
Expended on Work, whether as Expense or as Pro- 
ductive Labor, including Operation Times 64 

S-D. The Combined Cost and Route Sheet, and the Methods 
Employed to Distribute and Collate all Material and 
Labor Charges as well as Overhead Expense 64 

LECTURE XVII 

Indirect Costs (Reprinted from Chapter IV of the author's 

"Predetermination of Prices") 65 

4- A. Expense Symbols 65 

4- B . Expense Distribution 68 

4- C . Distribution of Burden 68 

4-D. Erroneous Methods of Distribution 77 

4-E. Differential Process Rate Method 84 

4- F. Undistributed Burden 92 



LECTURE XVIII 

Estimating (Reprinted from Chapter VI of the author's "Pre- 
determination of Prices") 93 

6- A . Machine Shop 94 

6-B. Foundry 97 

vii 



LECTURE XIX 

PAGE 

Profit and Relatively True Selling Prices (Reprinted from 
Chapters VII and VIII of the author's "Predetermination 

of Prices") 108 

7-A. Per Productive Hours 109 

7- B. Per Pound 110 

7- C. Per Piece Ill 

7-D. Per Cent of Cost Ill 

7-E. Mutual Satisfaction 112 

VIII. Conclusion 115 

LECTURE XX 

The Tool Room (Part of Chapter VI and Appendix of text) .... 117 

6- A. The Standardization of Methods and Tools 117 

XXVIII. Instruction for Tool Foremen (Page 287) 117 

XXIX. Instruction as to Tool Requirements (Page 298) 117 

XXX. Instruction for Care and Storage of Tools (Page 295) 117 

LECTURE XXI . 

Manufacturing and Erecting (Part of Chapter VI of text) 118 

6-B. The Development of a Manufacturing System 118 

6-C. The Handling of Erection Work 118 

LECTURE XXII 

Time Study and Bonus (Part of Chapter VII of text) 119 

7-A. Introduction of Time Studies 119 

7-B. Analysis of Time Studies and the Development of 

Instruction Cards 119 



LECTURE XXIII 

Time Study and Bonus, Continued (Part of Chapter VII of text) 120 
7-C. Discussion of Piece Work, Premium, Bonus, Differen- 
tial Rate and Differential Bonus Systems of Wage 

Payment 120 

7-D. Method used by the Author to Compute Differential 

Bonus 120 



LECTURE XXIV 

Time Study and Bonus, Continued (Reprinted from the author's 

"Scientific Management in the Foundry," Sections 9 and 10) 121 
9. The Control of Methods and Labor through Time Studies 

and Sub-Operation Times 121 

10. Time Study Foreman 122 



LECTURE XXV 

PAGE 

Time Study and Bonus, Continued (Reprinted from the author's 
"Scientific Management in the Foundry," Sections 11 to 
15 inclusive) 133 

11. Time Study Instructions in Detail 133 

12. Standard Elemental Sub-Operation Times for Floor Work 139 

13. Standard Sub-Elemental Operation Times for Bench and 

Squeezer Work 144 

14. Standard Miscellaneous Data 149 

15. General Instructions to Time Study Men 151 

LECTURE XXVI 

Time Study and Bonus, Continued (Reprinted from the author's 

"Scientific Management in the Foundry," Section 16) 152 

16. Parkhurst's Differential Bonus 152 

LECTURE XXVII 

Departmental and Plant Efficiency Bonus (from the manuscript 
of the author's "Scientific Time Study and Differential 

Bonus") 165 

27- A. Departmental Efficiency Bonus 165 

27-B . Plant Efficiency Bonus 180 

LECTURE XXVIII 
Departmental and Plant Efficiency Records 182 

LECTURE XXIX 

Inspection (Reprinted from the author's "Scientific Management 

in the Foundry," Section 17) 188 

17. Details of Inspection 188 

LECTURE XXX 

Results Obtained Through the Correct Application of the Science 
of Management (from the manuscript of the author's 

"Scientific Time Study and Differential Bonus") 198 

30-A. Effect on Production and Quality 198 

30-B. Effect on Costs 200 

30- C . Individual and Corporate Effect 201 



NOTE Some of the lectures will be illustrated thru means 

of lantern slides, particularly those lectures reprinted from the 
author's hooks noted above. The illustrations referred to have 
been omitted owing to the fact that the plates were not available. 



THE SCIENCE OF MANAGEMENT 



LECTURE I 

l-A. The History of the Science of Management. 
1-B. Bibliography. 

Before taking up the specific subject-matter of Lecture i, 
I want to say a few words in general covering a word on 
preparedness and the important place which the Science of 
Management may take in the solution of some of our Na- 
tional problems. Some of our best men believe that after 
the conclusion of the present European War, we are going 
to experience in the next ten or twenty years a terrific 
struggle between Nations for supremacy in the world's 
market. Indications are that Great Britain is right now 
looking far ahead in this respect. 

From information which has been obtained from men 
who have been abroad within the last few months, we are 
impressed with the difference between the attitude of the 
English manufacturers and that of the French and Italians. 
The English shops are closed tight. The general attitude 
in regard to information tends to make us believe that Eng- 
land is going' to be a big factor in the domination of the 
world's market. The only way the United States can hold 
or improve her position in this respect is by maximum con- 
centration, a broad policy, and the development of efficiency 
to its highest possible state. This means organization. 

The English and French, particularly, have undergone a 
tremendous awakening in regard to possibilities of increased 
production and hence decreased cost through more efficient 
operation. The demands of the war have of course forced 
this as a self-preservative necessity. Both these Nations 
have put forth efforts which they never before dreamed of. 
The vast quantity of munitions required has helped to im- 
press on them the advantages to be gained by manufactur- 
ing on a big scale and properly rigging up to do their work. 



2 HISTORY 

American manufacturers have led the world from a pro- 
duction standpoint. More or less efficient methods have 
tended to fit us for wonderful development along this line. 
We must not think for a moment, however, that we can lay 
on our oars. Our best efforts are going to be required after 
the war to successfully compete in the world markets, par- 
ticularly as our merchant marine has heretofore been almost 
a negligible factor. With Britain controlling the seas from 
9 commerce standpoint, our problem becomes all the greater. 

In the last five years, the manufacturers in America have 
in general begun to appreciate the possibilities of Scientific 
Management. It is not many years ago that Taylor's 
methods were laughed at and it has only been recently that 
results obtained in a good many different plants involving 
a total of eighty odd industries, have awakened the Ameri- 
can business man to the possibilities that lie before him if 
he will only become efficient. 

I have denned Scientific Management as follows : 

The Science of Management is the conservation 
of material, labor and resources, founded on 
research and exact data. 

America's place in the world market will depend on her 
organization and efficiency. 

1-A. The History of the Science of Management. 

Dr. Frederick Winslow Taylor was the founder of what 
is today known as Scientific Management. Dr. Taylor was 
born in Germantown, Pa., in 1856 and died March 21, 

I9I5- 

Dr. Taylor's primary education was obtained in the 
United States, France and Germany. He prepared at Exe- 
ter Academy for Harvard, class of 1874, at the age of 
eighteen years. At this time his eyesight gave him a great 
deal of trouble and prevented his taking up his course at 
•Harvard, and he had to entirely change his educational 
plans. 



FREDERIC A. PARKHURST 3 

Dr. Taylor came home and secured an apprenticeship at 
a small pump works in Philadelphia. He completed this 
apprenticeship in 1878 and took a job as laborer in the Mid- 
vale Steel Works, where he remained until 1890. While 
at the Midvale Steel Works, after working a time as la- 
borer, he obtained a position as shop clerk and then was 
promoted to take charge of the tool room. 

It was in connection with his work in the tool room that 
Mr. Taylor first saw and began to study the inefficiency of 
the methods then in use whereby workmen were allowed to 
do their own tool grinding - . He noticed that every man 
had his own idea as to how a tool should be ground and 
no two men ground their tools exactly alike. In fact it 
was doubtful if any one man repeatedly ground the same 
size and type of tool exactly alike. 

Based on his study of what he thought was needed in the 
way of tool grinding, Mr. Taylor invented the Taylor 
grinder, which grinder was put on the market and used 
somewhat extensively foi all standard shape lathe, planer 
and similar tools. Similar grinders have been put on the 
market for the same purpose. 

Six years after Mr. Taylor entered the employ of the 
Midvale Steel Company as a laborer, he became Chief En- 
gineer of that Company, having in the meantime filled 
various positions including foreman, Superintendent, etc. 

In 1880 Mr. Taylor took up a course of night study then 
required by the Stevens Institute and in 1883 obtained from 
Stevens Institute the degree of M. E. Mr. Taylor remained 
with the Midvale Steel Company until 1890. During this 
time he made a very exhaustive study of shop methods and 
with the co-operation of Mr. Wm. Sellers, was able to put 
these methods into effect in the Midvale Steel Company and 
greatly improve shop production. This production was in- 
creased 200 to 300%. 

In connection with the study of shop operations, Mr. 
Taylor immediately saw that it was necessary to get the 
co-operation of the workmen and pay them additional com- 



4 HISTORY 

pensation for the extra work turned out. This compensa- 
tion varied from 25% to 100%, depending- on the class of 
work involved. It was at the Midvale Steel Co. that Mr. 
Taylor formed the foundation for his life's work in the 
management field. 

In the years 1890 to 1893, Mr. Taylor was associated 
with a Company operating paper mills in the State of 
Maine. From 1894 to 1898 he devoted his time to con- 
sulting work. 

In 1898 Mr. Taylor was employed by the Bethlehem 
Steel Company to help them in an analysis of their machine 
shop problems and to help work out some solution to their 
difficulties whereby their production could be increased. 
The Bethlehem Steel Company had at that time just com- 
pleted a large addition to their forge shop and it was the 
consensus of opinion that an expenditure of about one mil- 
lion dollars for additional machine shop capacity would be 
needed for the additional increased forge shop capacity. 

In connection with Mr. Taylor's investigation of the 
Bethlehem Steel Company's problem, he immediately saw 
the necessity for doing something to increase the productive 
capacity of the machines. He saw that a very superior tool 
steel was needed to enable the machines to get out the work 
which they were capable of. 

In association with a Metallurgist, Mr. Maunsel White. 
a series of experiments and investigations were conducted 
which resulted in the discovery of the Taylor- White process 
for making high speed tool steel. This process resulted in 
increasing the efficiency of tool steel from 100 to 200%. 

The essential qualities of all high speed steels are those 
which were first made by Messrs. Taylor and White. The 
new steels revolutionized machine shop practice and also 
revolutionized the machine tool industry. As a result of 
these studies and the production of a high capacity steel, the 
production at the Bethlehem Steel Company's machine shop 
was increased 500%. Instead of building a large addition 



FREDERIC A. PARKHURST 5 

to their machine shop, a large addition to the forge shop 
was needed instead. 

In 1903, Mr. Taylor published his "Shop Management." 
"The Art of Cutting Metals" was published in 1906 and 
constituted Mr. Taylor's presidential address to the Ameri- 
can Society of Mechanical Engineers. This work has been 
considered a classic and will be found complete in the A. 
S. M. E. Transactions of 1907. Volume 28. "The Art of 
Cutting Metals" covers twenty-six years of experiments in 
connection with the scientific solution of this phase of the 
management problem. 

The students are earnestly requested to read Taylor's 
"Art of Cutting Metals," as a careful perusal of this work 
will very materially help them to understand what is in- 
volved in real Scientific Management. It will indicate to 
them the untiring energy, the deep attention to the problem 
and the necessity for the highest type of scientific minds 
which must be brought to bear on problems of this kind. 

The University of Pennsylvania in 1906 conferred on 
Mr. Taylor the degree of Sc. D. 

It will be interesting to review briefly some of Dr. Tay- 
lor's work in connection with the machine shop problem. 
The first questions involved were : 

(a) What tool shall I use? 

(b) What cutting speed shall I use? 

(c) What feed shall I use? 

In trying to determine the answers to the above questipns, 
many elements were involved with the result that before 
these questions could be answered, the effect of at least 
twelve variables must be definitely controlled. These twelve 
variables are : 

(a) The quality of the metal which is to be cut. 

(b) The diameter of the work. 

(c) The depth of cut. 

(d) The thickness of the shaving". 



O HISTORY 

(e) The elasticity of the work and of the tool. 

(f) The shape or contour of the cutting edge of 
the tool, together with its clearance and slip 
angles. 

(g) The chemical composition of the steel from 
which the tool is made and the heat treatment 
of the tool. 

(h) Whether a copious stream of water or other 
medium is used on the tool. 

(i) The duration of the cut; take notice i. e. the 
time which a tool must last under pressure of 
the shaving without being re-ground. 

(j) The pressure of the job shaving upon the tool. 

(k) The changes of speed and feed possible in the 
lathe. 

(I) The pulling and feeding power of the lathe. 

In discussing this work and further quoting from "The 
Art of Gutting Metals," Dr. Taylor divides the problem 
into four chief sections; namely — 

A. Laws connected with the art of cutting metals. 

B. The mathematical expression of these laws. 

C. Limitations and possibilities of metal cutting 
machines. 

D. Practical application of knowledge obtained by 
means of slide rules. 

In connection with the work above referred to, Mr. Tay- 
lor had associated with him, Mr. H. L. Gantt, one of the 
best scientific managers, and Mr. Carl G. Barth, also a 
noted scientific manager and one of our greatest mathema- 
ticians. Mr. Barth was able to design a slide rule which 
could be readily modified to suit each different machine and 
on which he was able to bring under control the twelve 
variables above mentioned. The result of adapting all these 
mathematical laws to the slide rule made it possible for any 
man after a few minutes of instruction and endowed with 



FREDERIC A. PARKHURST J 

only a very ordinary education, to quickly solve the three 
questions listed above; namely, what tool, speed and feed 
should be used for a given piece of work. 

Too much emphasis cannot be laid on the importance of 
not considering any one of the elements of Scientific Man- 
agement as of paramount importance, or of paramount 
necessity. To quote Mr. Taylor's final closing remarks 
after the discussion of his paper, "The Art of Cutting Met- 
als," at the A. S. M. E. Convention in 1906, "In conclusion, 
I can but express a certain surprise and regret that our 
paper 'On the Art of Cutting Metals,' has attracted so 
much more attention than has been given to our various 
papers on shop management, which, after all, is the real 
vital subject in which we are most interested, and of which 
the art of cutting metals constitutes, on the whole, merely 
one of the important elements." The fact remains that all 
of the elements of Scientific Management are of importance 
and must be co-ordinated before the final completion of this 
scheme of management and before the full effects of same 
can be realized both by the Company and the Company's 
employees. 

In the course of lectures to be given this year, all of the 
various elements will be discussed and treated as completely 
as the time will permit, so as to make clear to you all, the 
importance of the organization scheme in its entirety as 
opposed to the random installation of certain elements. 

The chief elements of Scientific Management as stated by 
Dr. Taylor himself are : 

A. Science, not rule of thumb. 

B. Harmony, not discord. 

C. Co-operation, not individualism. 

D. Maximum output in place of restricted output. 

E. Development of each man to his greatest effi- 
ciency and prosperity. 

Each of these elements will be discussed more completely 
at a later lecture. 



8 HISTORY 

In connection with the development of his work. Dr. Tay- 
lor had associated with him among others, H. L. Gantt, Carl 
G. Barth and Sanford E. Thompson. As time went on, he 
was more closely associated with other men as the scope of 
his work broadened and more engineers began to study and 
follow closely, Taylor's methods. 

Among the other early pioneers of this work may be 
named Gilbreth, Dodge & Day, Emerson and myself. I was 
fortunate in being closely associated with the above men to 
the extent of being able to clearly study particularly the 
work of. Taylor, Gantt and Barth. I was in position to 
profit by their mistakes and I profited by criticisms of their 
methods of handling this kind of work. Although never 
directly associated with any of them except Harrington 
Emerson, with whom I was connected when he started his 
first management work, I have, as above stated, been closely 
allied with their methods. I have been able to develop my 
own methods to get in my judgment, the best results by the 
application of the Taylor principles. 

In section i-B of this lecture I give a rather complete 
bibliography of the literature on the subject. This litera- 
ture is not very extensive and the majority of the books 
listed treat of generalities rather than all phases of the 
Science of Management. 

The leading books listed in the bibliography above men- 
tioned can be read to advantage. It is desirable that every 
student cover the field sufficiently to be able to understand 
the entire subject from a broad viewpoint. 

There are statistics from about one hundred thirteen 
(113) plants in the country that have adopted wholly or 
in part the principles of Scientific Management. These 
plants represent over eighty (80) industries. Of the num- 
ber above mentioned, fifty-nine (59) are reported as being 
complete successes, twenty (20) as partial successes, and 
thirty-four (34) failures. There are twenty-eight (28) 
cases now in process, of which it is expected that twenty- 
two (22) will be wholly successful. 



FREDERIC A. PARKHURST 9 

Failures are due chiefly to two causes : ( I ) The inability 
of the so-called expert to successfully handle the proposi- 
tion; (2) Faulty management. The responsibility for the 
failures is practically equally divided between the expert 
and the management. Incompetency on the part of the 
management, dissension, and in one or two cases, unfavor- 
able conditions of business are responsible for the manage- 
ment failures. 

With one possible exception, there have been no failures 
due to difficulty with workmen. The only exception that 
might be mentioned is the case of the Watertown Arsenal, 
but this was due more to the fault of the local management 
than on account of the methods being installed. In this 
case the labor difficulty was only of short duration, and 
Gen. Crozier shows conclusively the great saving and ad- 
vantages that accrued as the result of the installation of 
the Taylor system of management. 

Any installation that is self-sustaining and continues to 
run efficiently long after the engineer has left the work, 
may be considered as being a wholly successful proposition. 
A great many of the companies prefer to have the engineer 
retained on a part time basis so as to supervise at intervals 
the current w r ork of the organization. This is a most de- 
sirable way of handling an installation of this kind. 

Unfortunately, a good many accountants or so-called sys- 
tematizes have attempted to put in forms and give the 
name "Scientific Management" to ordinary routine installa- 
tion pertaining chiefly to records. Scientific Management, 
as I will show during the ensuing lectures, is a rather com- 
plex and scientifically worked out scheme of operation and 
control which varies to some extent in detail with each dif- 
ferent installation. Scientific analysis and research must be 
the basis of every installation, some of the research being 
of a most extensive and thorough order. 

There are elements involved in every-day operation of the 
manufacturing industries which the layman rarely stops to 



IO HISTORY 

consider. In a very large percentage of cases these elements 
are not by any means under control nor has there been any 
great attempt made to bring them under control. It is the 
object of Scientific Management, as I have briefly indicated 
above, to analyze the various problems into their elements 
and bring these elements under control, all based on scien- 
tific investigation and fact. 

The remaining lectures of this course will treat on the 
subject as completely as the time allotted will permit. The 
lectures cover the entire field, however, to such an extent 
that the student will be able to have a rather complete idea 
by the end of the year as to just what is involved. He will 
be well fitted to take up further study of this subject, or 
to co-operate with any organization of the type under con- 
sideration. 

The psychological element is of great importance, as in 
connection with the management problem we have to handle 
the great human variable. Psychology is one of the big con- 
trolling - factors. 



*s 



1-B. Bibliography. 

This bibliography is quoted almost entirely from "The Taylor System of 
Scientific Management" by C. Bertrand Thompson, 1917. 

The Taylor and Other Systems of Shop Management. 

Hearings before Special Committee of the House of 
Representatives to investigate. Washington, Govern- 
ment Printing Office, 1912. 1-801, 803-1264, 1265- 
1935. Free. 

Testimony of "Taylor System" and other man- 
agement engineers, labor leaders, workmen and 
War Department officials, regarding the meaning 
and actual operation of the Taylor system. One 
of the best sources. 



frederic a. parkhurst ii 

Brandeis, Louis Dembitz 

Scientific Management and Railroads, New York, En- 
gineering Magazine Co., 191 1, vii, 1-92, $1.00. 

A severely concise and logical presentation of 
principles, backed by the testimony of witnesses in 
the famous Eastern Rate Case hearings before the 
Interstate Commerce Commission of 1910. This 
testimony and Mr. Brandeis' argument made 
scientific management famous. 

Child, Georgie Boynton 

The Efficient Kitchen, New York, McBride, Nast Co., 
1914, xiii, 1-242, $1.25. 

Based on work of the Housekeeping Experiment 
Station. Stamford, Conn. Excellent discussion 
of methods and equipment. Hard reading but 
practical. 

Church, Alexander Hamilton 

Science and Practice of Management, New York, En- 
gineering Magazine Co., 1914, xviii, 1-535. $2.00. 

A keen analysis and synthesis of the factors in- 
volved in industrial management. Somewhat 
critical of the Taylor system, but obviously in- 
fluenced by it. A substantial contribution to the 
literature of scientific management. 

Cooke, Morris Llewellyn 

Academic and Industrial Efficiency, New York. Car- 
negie Foundation for the Advancement of Teaching, 
19 10. Bulletin Number Five vii, 2-134. Free. 

A highly interesting study of the efficiency of 
management of a number of well-known univer- 
sities and colleges, as judged from the point of 
view of an industrial engineer. Stimulated a wide 
discussion. 



12 HISTORY 

Day, Charles 

Industrial Plants, New York, Engineering Magazine 
Co., 191 1, 1-294. Amplified from articles appearing 
originally in the Engineering Magazine. $3.00. 

An illustration of the application of some of the 
principles of scientific management to the design 
and construction of industrial plants. Illustrated 
with diagrams and photographs. 

Drury, Horace Brookwalter 

Scientific Management, a History and Criticism. New 
York, Columbia University, 1915, 7-222. $1.75. 

A doctoral thesis, especially good for its discussion 
of the origins of the movement and its relation to 
the problems of labor and wages. Betrays a lack 
of practical acquaintance with current methods 
and status. 

Emerson, Harrington 

Efficiency, New York, Engineering Magazine Co., 1st 
ed. 1909, 4th ed. 1914, xii, 1-254. $2.00. 

A strikingly written exhortation to "efficiency," 
stimulating, and most useful when it leads the 
reader to< serious study of the authorities on the 
subject, such as Taylor and Gantt. 

Emerson, Harrington 

The Twelve Principles of Efficiency, New York, En- 
gineering Magazine Co., 1912, xviii, 1-423. $2.00. 

An interesting and popular analysis of some of 
the more obvious principles underlying scientific 
management. Well written and suggestive in a 
general way. For practical application of prin- 
ciples see Knoeppel, "Installing Efficiency Meth- 
ods." 



FREDERIC A. PARKHURST 1 3 

Evans, Holder A. 

Cost Keeping and Scientific Management, New York. 
McGraw-Hill Book Co., 191 1, ix, 1-252. $3.00. 

A practical machine shop treatise, showing the 
author's methods as applied at the Mare Island 
Navy Yard, and illustrating what may be done 
by way of approach to the Taylor system by a 
competent manager without the aid of experts. 
Fairly well illustrated. 

Gantt, Henry Lawrence 

Work, Wages and Profits, New York, Engineering 

Magazine Co., 1910, 2nd ed. 1913, 1-2 12. $2.00. 

The meat of the author's numerous papers and 
discussions on the more "human" side of scien- 
tific management. Illustrated with charts and 
forms. A classic, and indispensable. 
Gilbreth, Frank Bunker 

Motion Study, New York, D. Van Nostrand Co., 191 1, 

xxiii, 1-116. $2.00. 

A meaty study of the variables involved in the 
performance of manual labor. Illustrated with 
photographs and tables showing the author's meth- 
ods and results in the bricklaying trade. 
Gilbreth, Frank Bunker 

Primer of Scientific Management, New York, D. Van 

Nostrand Co., 1912, 2nd ed. 1914, viii, 1-108. $1.00. 
An elementary, popularly written catechetical 
presentation of the fundamentals of scientific man- 
agement. Explains some of the characteristic de- 
tails of the Taylor system and discusses certain 
current criticisms. 
Kent, William 

Investigating an Industry, New York, John Wiley & 

Sons, Inc., 1914, xi, 1-26. $1.00. 

A highly suggestive diagnosis of a hypothetical 
plant, with special attention to the departments of 
sales and financing usually neglected in works on 
scientific management. Foreword by H. L. Gantt. 



14 HISTORY 

Knoeppel, Charles Edward 

Installing Efficiency Methods, New York, Engineering 
Magazine Co., 191 5, viii, 1-258. $3.00. 

The best presentation of the Emerson system in 
its best form. Interesting and stimulating. Fully 
illustrated with forms, charts, photographs and 
detailed instructions. 

Park hurst, Frederic Augustus 

Applied Methods of Scientific Management, New 
York, John Wiley & Sons, 1912, xii, 1-325, 2nd ed. 
i9 J 7> 1-337- $ 2 -°o- 

A detailed description of the methods of the Fer- 
racute Machine Company, including the "standing 
orders" for the performance of various functions, 
and many forms and photographs. Is a close ap- 
proximation to the Taylor system as now prac- 
ticed by its leading exponents. 

Parkhurst, Frederic Augustus 

Scientific Management in the Foundry, 1-133. Read 
before the American Institute of Metals, Chicago Meet- 
ing, Sept., 19 14, and Published complete in Transac- 
tions of American Foundrymen's Association, Vol. 
XXIII. 

A detailed description in condensed form of the 
application of the author's methods of scientific 
management throughout the eight plants of The 
Aluminum Castings Co., which plants involve not 
only the sand molding trades for aluminum and 
brass, but highly technically developed melting 
practices and technical control of metals, large 
brass finishing shop doing the highest class of fin- 
ished work in both brass and aluminum, and the 
operation of two secret process plants. 



frederic a. parkhurst 1 5 

Parkhurst, Frederic Augustus 

Predetermination of Prices, New York, John Wiley & 

Sons, 1916, viii, 1-96. $1.25. 

A discussion of a rather advanced practice in con- 
nection with the co-relation of costs and the pre- 
sentation of vital facts in condensed form includ- 
ing a description of a scientific method of deter- 
mining burden rates and the distribution of gen- 
eral expense as applied in connection with the 
author's methods. 

Parkhurst, Frederic Augustus 

Symbols, New York, John Wiley & Sons, 191 7, vi, 
1-165. $2.00. 

A discussion of the symbol system. This book 
includes a rather complete detailed list of the dif- 
ferent group symbols that have been standardized 
to date, which standardization can in general be 
quite universally adopted. Probably the only book 
devoted entirely to symbols. 

Parkhurst, Frederic Augustus 

Scientific Time Study and Differential Bonus. About 

450 pages, in course of preparation. 

This book will contain about 25 chapters and will 
discuss the various standardizations that have 
been developed by the author in connection with 
standard elemental operation times as well as a 
general time study work. The charts and dia- 
grams show performance in a wide range of in- 
dustries employing representative trades through- 
out, with detailed instructions as to time study 
data, etc. Various systems of wage payments will 
be discussed and will include all of the author's 
job classifications, bonus classes, and a wide range 
of application of his differential bonus to direct 
and indirect labor, departmental and plant effi- 
ciencies, the application of bonus to clerical opera- 
tions, technical work, etc. The last chapter will 



1 6 HISTORY 

include a statement as to the individual and cor- 
porate results obtained through the author's meth- 
ods of scientific management. 

Pattison, Mary 

Principles of Domestic Engineering, New York, 19 15, 
1-3 10. $2.00. 

Experiments at Colonia, for N. J. Women's Clubs. 
Deals not so much with details of methods and 
equipment as with fundamental principles of home 
building and management. 

Shaw, A. W., Company 

In magazines (System and Factory) and works 
(including The Library of Factory Management) 
published by this house there has appeared from 
time to time material having to do with the Tavlor 
system of scientific management. This is also true 
of other periodicals and sets not mentioned here, 
but in most cases taken into consideration in pre- 
paring Scientific Management (see below). 

Taylor, Frederick Winslow 

On the Art of Cutting Metals, New York American 
Society of Mechanical Engineers, 1907, 3-248, and 
folders 1-24. $3.50. 

One of the most notable contributions to practical 
science. Illustrates by example the fundamental 
methods and aims of scientific management. 
Preface reproduced in C. B. Thompson's Scientific 
Management. 

Taylor, Frederick Winslow 

The Principles of Scientific Management, New York, 
Harper & Bros., 191 1, 5-144. Also published by Amer- 
ican Society of Mechanical Engineers. $1.50. 

A popular restatement of the principles as matured 
by the author after retirement from active prac- 
tice. More readable than "Shop Management" 
and equally authoritative, though in a more gen- 
eral way. 



frederic a. parkhurst ij 

Taylor, Frederick Winslow 

Shop Management, New York, Harper & Bros., 191 1, 
5-203. Foreword by Henry R. Towne. Also in Trans- 
actions American Society of Mechanical Engineers, 
No. 1003, New York, 1903, $1.50. 

The fundamental classic of Scientific Manage- 
ment. Incorporates the best of the author's for- 
mer writings and experience, and is the basis of 
the later developments. Indispensable. 

Taylor, Frederick Winslow, and Thompson, Sanford 
Eleazar 

Concrete Costs, New York, John Wiley & Sons, 19 12, 
xii, 1-709. $5.00. 

Illustrates in detail the application of the time- 
study and standardization methods of scientific 
management to concrete structural work. Illus- 
trated fully with charts, sketches, tables of ele- 
mentary times, etc. 

Thompson, Clarence Bertrand 

Scientific Management, a collection of the more sig- 
nificant articles describing the Taylor System of Man- 
agement, Cambridge, Mass., Harvard University 
Press, 1 9 14, xii, 3-88, $4.00. 

Includes the cream of the literature on the sub- 
ject (outside of the standard works of Taylor and 
Gantt) selected and edited from periodicals and 
books, many of which are now out of print or 
otherwise difficult of access. See below for con- 
tents. 

contents of scientific management 
(The book listed just above) 

Earth, Carl G. 

Slide Rules in the Machine Shop as a Part of the 
Taylor System of Management. 



1 8 HISTORY 

Cardullo, Forest E. 

Industrial Administration and Scientific Manage- 
ment. 

Carlton, F. Tracy 

Scientific Management and the Wage-Earner. 

Clark, Sue Ainslee and Wyatt, Edith Franklin 

Scientific Management as Applied to Women's 
Work, from "Making Both Ends Meet." 

Crozier, Gen. Wm. 

The Taylor System of Shop Management at the 
Watertown Arsenal. 

Cunningham, Wm. J. 

Scientific Management in the Operation of Rail- 
roads. 

Day, Charles 

Management Principles and the Consulting En- 
gineer. 

Dodge, James Mapes 

A History of the Introduction of a System of 
Shop Management. 

The Spirit in which Scientific Management should 
be approached. 

Gantt, Henry L. 

A Graphical Daily Balance in Manufacture. 

Hathaway, H. K. 

Elementary Time Study as a Part of the Taylor 

System of Scientific Management. 

The Planning Department, Its Organization and 

Function. 

Prerequisites to the Introduction of Scientific 

Management. 



FREDERIC A. PARKHURST IO, 

Kendall, Henry P. 

Unsystematized, Systematized, and Scientific 
Management. 

Kent, Robt. Thurston 

The Foreman's Place in Scientific Management. 
The Tool Room under Scientific Management. 
Scientific Management as viewed from the Work- 
man's Standpoint. 

Kimball, Dexter S. 

Another Side of Efficiency Engineering. 

Le Chatelier, Henri 

Preface to the French Edition of "The Principles 
of Scientific Management." 

Lewis, Wilfred 

An object Lesson in Efficiency. 

Myers, Lieut. C. J., U. S. N. 

The Science of Management. 

Shaw, Arch Wilkinson 

Scientific Management in Business. 
Smith, Oberlin 

Nomenclature of Machine Details 

Sterling, Lieut. Frank W., U. S. N. 

The Successful Operation of a System of Scien- 
tific Management. 

Stimpson, H. F. 

The Application of Scientific Management to a 
Railway Shop. 

Sub-Committee on Administration of the American 
Society of Mechanical Engineers, 1912 
The present State of the Art of Industrial Man- 
agement. 
The Railways and Scientific Management. 



20 HISTORY 

Anon — 

The Mistakes of the Efficiency Men. 

Taylor, Frederick W. 

On the Art of Cutting Metals (Preface and Se- 
lections from the ensuing discussion). 
A Piece-Rate System : Being a Step Toward a 
Partial Solution of the Labor Problem. 

Thompson, C. B. 

Bibliography of Scientific Management. 

Classification and Symbolization. 

The Literature of Scientific Management. 

The Relation of Scientific Management to the 

Wage Problem. 

Scientific Management in Retailing. 

Tuck School Conference 

Addresses and Discussions at the Conference on 
Scientific Management. Hanover, N. H., Amos 
Tuck School, 1 9 1 2, xi, 1-388. $2.50. Papers by 
F. W. Taylor, H. L. Gantt, C. H. Jones. H. P. 
Kendall, J. M. Dodge, H. Emerson and others, 
and discussions led by H. K. Hathaway, E„ 
Szepesi, C. H. Jones, M. L. Cooke, E. F. Gay, F. 
A. Cleveland, and others. The best of these are 
reprinted in C. B. Thompson's "Scientific Man- 
ae-ement." 



LECTURE II 

FUNDAMENTALS ; PRACTICE VERSUS THEORY IN THE 
SCIENCE OF MANAGEMENT 

It is not the author's intention to imply by the title of this 
article that practice and theory do not each bear a most im- 
portant part in the science of management. These two words 
are symbolic of two chief factions, one for and one against 
our new science of management. To the layman, scientific 
management is a theory, pure and simple. To the manufac- 
turer, who has put his plant under this form of manage- 
ment, it stands for prosperity to the firm and all its em- 
ployees, a new era of industrial peace and contentment, low 
costs and high wages. 

It is not at all remarkable that there should be such a wide 
difference of opinion on this subject. It would indeed be 
remarkable if it were not so. History repeats itself. What 
is now true of scientific management has been in the past 
true of all great ^teps or changes, tending to the advance 
ment of the human race. The march of progress in all 
things would cease were there no obstacles to surmount. 
Columbus, Watt, Ericson, Morse, Marconi, Langley, Edi- 
son, Brush, Chanute and the Wright Brothers, as well as 
many others, were each and every one at first considered 
theorists or cranks. Their dreams of the possibilities of 
their chosen lines of work at first seemed ridiculous to their 
contemporaries but the practical application of their ideas 
has far outstripped their broadest conception of these sub- 
jects. 

There is no doubt that the new science of management 
will come into its own through exactly the same process of 
transition. The few chief exponents of scientific manage- 
ment are in exactly the same position as were the inventors 
and investigators mentioned above. No one can deny that 
the field of the organizing engineer opens into vast fields of 

21 



22 PRACTICE VS. THEORY 

progress. The benefits which will accrue from the universal 
application of the new science of management will affect in 
a greater or less degree all of the working class in this 
country, eventually the world. The author predicted in a 
lecture before the New England Railroad Club at Boston, 
December, 1904, that the science of management was 
"slowly but surely becoming universal in this country." 
That was nearly thirteen years ago and he now reiterates 
the same prophecy. In fact, the striving for efficiency in 
life as well as business is becoming universal much faster 
than any one, except the best informed, realizes. This is 
primarily due to the fact that in the last six years, scien- 
tific management has been prominently brought to the at- 
tention of the entire country on several great occasions. 
Chief of these are : 

1. The Interstate Commerce Commission investigation in 
191 1 into the proposed increase in railroad freight rates. 

2. The formation in New York, December, 191 1, of the 
Society to Promote the Science of Management. 

3. The conference on scientific management at the Amos 
Tuck School of Administration and Finance at Dartmouth 
College, in October, 191 1. 

4. Formation of the Efficiency Society in New York, in 
the spring of 19 12. 

5. Congressional Committee's investigation and report on 
the Taylor and similar methods of scientific management in 
1912. 

In addition to the above mentioned events there has been 
a general exploitation and discussion of the subject in 
nearly, if not all, of the trade journals, monthly magazines 
and society transactions, to say nothing of the newspaper 
reports, etc. All of this publicity has of course had its 
effect. Fortunately and justly, the majority of the articles 
and discussions have been favorable in their attitude. The 
few which have not been so were obviously written by per- 



FREDERIC A. PARKHURST 23 

sons scanning the subject superficially or with distorted 
vision. 

I am sure that all the chief supporters and exponents of 
scientific management will join me in heartily inviting a 
thorough and impartial investigation of its principles and 
the results which follow a practical application of those prin- 
ciples. Such an investigation is the easiest, most logical 
and surest way of enlightening oneself on the subject. It 
is unfortunate that a number of would-be critics have appar- 
ently not made a thorough and impartial study of this sub- 
ject "on the ground." They have evidently passed the door 
and guessed as to what was within. They have a perfect 
right to guess, form their own opinions, etc., for their own 
personal satisfaction. When they attempt, however, to ex- 
ploit their supposed knowledge of the subject to the detri- 
ment, intentionally or otherwise, of those directly to be bene- 
fited by the adoption of scientific management, it is time 
they and their followers become enlightened. 

There are undoubtedly many "theorists" who believe that 
scientific management can be studied, rehearsed and memo- 
rized in the school room or library and "presto !" an effi- 
ciency engineer is born. It must be acknowledged that 
many efficiency engineers have sprung into the field in just 
this way. They are full of theory but not the theory, and 
without the practical knowledge of their subject or of men. 

Many theories may of course be formed by as many dif- 
ferent men. These theories but reflect the scope of each 
man's imagination or grasp of the fundamentals. There 
may be many theories as to scientific management, what it 
is, its scope, value, etc. That these theories vary so widely 
is but natural. They are due entirely to a lack of under- 
standing, or full comprehension of the fundamental prin- 
ciples. Mr. Fred W. Taylor defines scientific management 
as a combination of the following elements : 

A. "Science, not rule of thumb." 

B. "Harmony, not discord." 



24 PRACTICE VS. THEORY 

C. "Co-operation, not individualism." 

D. "Maximum output in place of restricted output." 

E. "Development of each man to his greatest efficiency 
and prosperity." 

Many people consider the above combination of elements 
a theoretical proposition which works out easily on paper 
but will not resolve itself into a practical solution. Let us 
analyze Mr. Taylor's principles separately: 

A. "Science, not rule of thumb." There has been much 
criticism of the word "science" or "scientific" as applied to 
the problem of management. Many critics claim that there 
can be nothing scientific in works-management and that the 
word so used is incorrect. Webster's definition of science is : 
"Systematized knowledge of the conditions and relations of 
mind and matter; accepted facts and principles as demon- 
strated by induction, observation or experiment." If sys- 
tematized investigation and compilation of data pertaining 
to knowledge of the conditions and relations of mind and 
matter do not represent the most important feature of 
proper management, then what does? A common-sense 
method of proceeding with each piece of work is to find 

(a) What must be done. 
(&) What material used. 

(c) How must it be done. 

(d) With what tools. 

(<?) How long will it take. 
(/) When will it be done. 
(g) What will it cost. 

To answer these preliminary questions satisfactorily one 
must have a complete knowledge of the equipment and ma- 
terial involved, of the qualifications of the individual work- 
ers and of the various other elements entering into the com- 
pletion of each piece of work. This comprehensive knowl- 
edge comes through specially trained men, detailed to carry 
on and record all investigations necessary. It is most cer- 
tainly in line with scientific methods of procedure. 



FREDERIC A. PARKHURST 25 

B. "Harmony, not discord." It is needless to say much in 
the way of advocating the desirability of harmony over dis- 
cord. This of course is axiomatic and there can possibly be 
no sustained criticism of such a feature in any form of man- 
agement, whether scientific or otherwise. 

C. "Co-operation, not individualism." Another com- 
mon-sense element which allows of little controversy. 

D. "Maximum output in place of restricted output." A 
concern to be successful, and to run its business profitably, 
must realize from its equipment and working force a maxi- 
mum output and each must maintain that condition if it 
hopes to stay in business in the face of modern competition. 
The country is suffering to-day from over equipment in the 
way of plants and accessories. The result shows a great 
waste both in first investment and indirect charges including 
depreciation while the plant is running, to say nothing of 
the great overhead charge and depreciation in slack times 
when the plant is lying idle. Why deny that maximum 
production is too often striven for in a most unintelligent 
way ? As far as the personnel is concerned, maximum pro- 
duction can only be obtained by surrounding them with the 
elements mentioned above — science, harmony and co-opera- 
tion. 

E. "Development of each man to his greatest efficiency 
and prosperity." Here again we have an element which 
should need but little argument in support of it. In point 
of fact, however, we often find opinions to be diametrically 
opposed to what we would naturally expect to find. The 
trouble, however, is not with the principle involved or with 
the theory that it is a desirable and necessary thing to strive 
for — this maximum efficiency and prosperity. The cause is 
often a lack of knowledge of what is involved and a deplor- 
able misunderstanding of the objects and intentions of those 
striving to bring about maximum efficiency. 

I have discussed these principles at some length and many 
may think I am going over ground which has already been 
covered. My object, however, in doing this is to again bring 



2(5 PRACTICE VS. THEORY 

before those who have not clearly analyzed the principles of 
scientific management what is involved and just what the 
ideal is. There has been too much taken for granted on the 
part of some critics. The result has been a certain factor of 
opposition, which is wholly uncalled for. May this resume 
help to clear the subject. 

One of the common criticisms heard is to the effect that 
"scientific management may do for some kinds of work, but 
it will not do in ours." The exponent of the science of man- 
agement must ever bear in mind that he faces an educational 
proposition continually. It is easy to condemn something 
which one does not understand. This being an admitted fact 
and bearing in mind that many of the persons directly af- 
fected by the introduction of scientific management are not 
in a position to understand these things, it behooves every 
organizing engineer to pay special attention to this one fea- 
ture — namely, education. 

In considering the educational feature one must not over- 
look the psychological element involved. To the author's 
mind this is the most important factor in the successful in- 
stallation of the science of management, and is the one thing 
which has made failures from what would otherwise have 
been successes. That such failures have existed cannot be 
denied. It is equally true that the trouble has never been 
with the principles involved but usually with the general 
unfitness of those attempting to carry out the work. Other 
failures can be traced to the attempt to copy and install some 
particular feature of scientific management without the rest 
of the elements necessary. Men attempting to do this 
usually have a superficial book-knowledge of the subject and 
are wholly lacking in the true conception of the ideals and 
principles involved. Practical shop experience and the abil- 
ity to handle men are absolute requisites for the successful 
introduction of the principles by any engineer. 

Before taking up in detail some examples to illustrate the 
difference between the theoretical feature, or the bare out- 
line of principle, and the practical method of installing those 



FREDERIC A. PARKHURST 2J 

principles, I want to emphasize the fact that it is not so 
much zvhat you do in the way of radical changes as in how 
you make them. Again I repeat that the true conception 
and realization of the psychological element and its bearing 
on every branch of management work must be recognized as 
the most important of all the elements. To be successful 
xhe organizing engineer must master the psychological fea- 
ture of each and every problem first, last and always. 

Now as to the methods used in the practical application of 
the above mentioned principles, the organizer must thor- 
oughly acquaint his client with what is involved in order to 
realize from these principles maximum results. Stockhold- 
ers, directors and officers of the company must be informed 
/is to what may be expected in the way of results. They 
should thoroughly study all phases of the problem and try 
to realize the difficulties likely to be met. Not the least of 
these will be the idiosyncrasies and biased ideas of some of 
the personnel. The fact must not be lost sight of that at 
least some of the older and most valuable employees must 
be patiently and carefully weaned from some or most of 
their old traditions and habits. Those of the old school must 
not be blamed if at first they show ignorance or disapproval 
of radical changes. Their environment and training is re- 
sponsible for this frame of mind. These same men will be 
the most enthusiastic and the strongest supporters of the 
new regime when they begin to see its advantages. They 
will be the first to show a new and lasting sense of satis- 
faction and contentment with the elimination of friction, the 
maintenance of schedules and the increased results easily 
accomplished with a minimum of mental and physical 
outlay. 

The period of transition is often a long and annoying one 
for all concerned. This is due to the many variables to be 
overcome. Patience and tact will win out in the end if each 
and every one realizes that every one is human after all. 
Time is the essential factor, and the time required depends 
upon the mental attitude of each. The author to-day enjoys 



28 PRACTICE VS. THEORY 

the friendship and co-operation of many men now working 
under scientific management, who at first opposed him at 
every turn and condemned new methods before sufficient 
time had elapsed to prove their worth. Men must be shown, 
educated, led, not driven. It is only the extreme case where 
in the end a man has to be removed for failure to abide by 
the new order of things. Study each man's character, find 
the avenue of approach and he can be educated and made 
efficient in spite of himself. Many men, particularly those 
in the more responsible positions, have a natural and deeply 
rooted antipathy for being shown by others. They wish 
to be known and recognized as the originator of all that is 
new or an improvement over the existing order of things. 
It has been my experience that one of the best and surest 
ways of handling persons of this make-up is to accomplish 
the desired end through suggestion. In the majority of 
cases a few words followed judiciously with concrete ex- 
amples to illustrate your point will sow the seed of desire. 
This seed will immediately take root and sprout forth as an 
original and newly discovered method sure to meet the 
exigencies of the occasion. This method will not do with all 
men of this mental attitude. Some will not be influenced or 
convinced until shown by actual accomplishment. Others 
can be recruited by the proper presentation of the results of 
an analytical study of conditions followed by cold, impartial 
figures. Figures talk, especially if they are always recap- 
itulated into a bare statement of value in dollars and cents. 
Other men will be found in every organization who have 
an inherent faith in any new departure ordered by their 
superiors. Such cases do not offer the same kind of handi- 
cap, as do those above cited. They do offer another possible 
source of trouble however : that of a too earnest wish to 
reach the desired goal, without due appreciation of the diffi- 
culties and conditions to be overcome and changed. Mate- 
rial difficulties can be removed with comparative ease. 
Changes directly affecting the personnel are often far from 
easy and continual restraint must be exercised for this rea- 
son. If this restraint is riot present the too enthusiastic 



FREDERIC A. PARKHURST 20, 

department head or some subordinate will find himself op- 
posed by a stone wall of personal opposition. Many men 
can be led but only the few can be pushed. 

Education of the rank and file is fully as important as the 
education of the principals and heads of departments. The 
education of the former is much easier, however, when the 
latter have graduated, so to speak. Let those at the top set 
the example. Shop men as a rule have the erroneous idea 
that their superiors and office force are inclined to consider 
themselves on a much higher plane and seemingly force 
themselves to the necessary intercourse with those beneath 
them. There is no doubt but that in many cases this con- 
dition exists. That it is often so is most unfortunate as 
well as unnecessary — and most undesirable. One of the 
greatest advantages of real scientific management lies in the 
fact that such a demoralizing and disastrous condition of 
affairs is eliminated. I do not mean to imply by this state- 
ment that scientific management is the sole remedy for such 
a condition, but it is nevertheless a sure remedy. In point 
of fact, under scientific management the rank and file are 
placed in position to demand and get from their superiors 
proper working conditions, and as to maintenance of equip- 
ment and supply of material, to get co-operation, and the 
"square deal." Responsibility is placed where it belongs. 
No one high or low can "put it over" on another, because 
the responsibilities and duties of each are clearly defined in 
writing. The pressure of responsibility is not one sided and 
concentrated in one place, or directed towards the weak. It 
is equalized. Instead of turmoil and contention like the 
troubled and restless sea, which makes smooth running im- 
possible, we have the calm and reliable medium of a harbor 
sheltered by the bulwarks of harmony. The least opposing 
influence immediately becomes apparent. It can be localized 
and remedied at once. 

The best influence is an honest confidence in the entire 
personnel. An efficient organization with reliable heads and 
a spirit of co-operation in touch, through these mediums, 



30 PRACTICE VS. THEORY 

with all of the personnel, lays the foundation for a lasting 
and trouble-free industrial or business condition. To bring 
about these conditions eternal vigilance is necessary. No one 
must be allowed to harbor any misunderstanding as to the 
intent of the reorganization. Investigate and trace to its 
source every disturbing influence. Let no one misunder- 
stand the ultimate object in view. Openly advertise and 
propound the chief elements or principles of our new science 
of management. 

A. Science, Not Rule of Thumb 

Having observed the above essentials, the next step is to 
bring under control equipment, methods and output. This 
has formerly been left to the foreman and bosses. Details 
and responsibilities have been thrust upon them which 
should be borne by others. Specialization is the order of 
the day under scientific management. 

The modern planning room is the first really radical inno- 
vation. The production clerk, order-of-work clerk, route 
clerk, material boss, shop engineer, time-study man and 
speed bosses, are new functional men. These are created 
to take off of the shoulders of foremen and others, duties 
for which they are specially trained. Through this depart- 
ment we begin to control shop equipment, methods and 
material. 

The different planning-room men begin through analyti- 
cal study of conditions to determine the shop conditions. 
Work for the shops is planned and distributed in the most 
efficient way. Delays due to faulty equipment are investi- 
gated and a recurrence made impossible. Equipment is 
tuned up, cared for and kept in repair. The result is that 
each machine and man is made more productive. There 
are no waits or delays on account of absence of material 
with which to work. Some men or machines are not piled 
up with work while others work from hand to mouth. The 
work ready for processing is evenly and judiciously distrib- 
uted. I have known of cases where one-third (1-3) of a 



FREDERIC A. PARKHURST 3 I 

day of man and machine, often of gangs of men, has been 
wasted, due to such causes. This condition is common ; the 
effect is demoralizing and tends to gradually decrease the 
daily output per man. Over equipment due to lack of plan- 
ning and to pure guesswork is also largely responsible for 
a decreased output per capita. Production clerk, order-of- 
work clerk, route clerk, and material boss remedy this. 

Having provided for the maintenance of standardized 
equipment, conditions and flow of material, the methods 
must be investigated. The shop engineer determines the 
tools and methods; the time-study boss determines the 
standard time, and the data is available for the issuance of 
instruction cards. The speed bosses then see that the in- 
struction cards are followed and the standard time realized. 



LECTURE III 

fundamentals; practice versus theory in the 
science of management (continued) 

It will be seen by the above brief explanation (see Lec- 
ture 2) that what is ordinarily done by one or two men is 
done under scientific management by six or seven or more, 
depending upon the kind of business. What is the result? 
Each of the chief planning room men becomes highly profi- 
cient in his particular branch. Through them it is possible 
to itemize and analyze into small elements all details of a 
business. They have complete and up-to-date records of all 
work which has been done. Comparison can be made, both 
of methods, quality, time and cost. Relative capacity of ma- 
chines, men, productive units and departments can be made, 
and work planned and distributed accordingly. Elemental 
operations can be standardized, and men can be trained to 
do them in standard time with a minimum of effort. Each 
man's efficiency can be kept track of and his work and pay 
regulated, independent of his fellow workmen. The ac- 
cumulation of data makes possible the correct determination 
of how much men as well as machines can do daily without 
undue fatigue and eventual break-down. We can safeguard 
our machines by not overloading them, because stresses due 
to tool pressure, torque and vibration, can be controlled 
through instruction cards. Fewer accidents will occur on 
this account because detailed study of operations determines 
the best and safest way to do a given piece of work. Not 
many people realize how comparatively few different ele- 
mental operations are actually necessary for the performing 
of all kinds of work in any one trade, until they have 
analyzed and studied them personally. 

Consider the above carefully and then answer the follow- 
ing questions for yourself. Can any foreman who is in 

32 



FREDERIC A. PARKHURST 33 

charge of the average sized department with all its variety 
of equipment and its twenty-five to fifty or more men, keep 
track of all the above elements and so obtain maximum effi- 
ciency? Were he mentally and physically capable of all the 
work necessary, could he be an expert and highly proficient 
in so many different lines ? Could he even find time to both 
plan and execute on the scale required ? Would he be in pos- 
session of the data necessary to absolutely control methods, 
conserve the time of each man, eliminate delays, etc. ? Could 
he be always fair and just and impartial in handling his 
men? The answer is most emphatically no. A jack of all 
trades is master of none. Yet ordinary management often 
demands of its foreman all of the above and more. 

What will the planning room accomplish for a concern? 
Combined with bonus system of extra remuneration, it will 
result in doubling, tripling, and sometimes quadrupling the 
output of a plant. It will reduce labor costs, including the 
extra overhead from 30 per cent, to 50 per cent, and in- 
crease wages from 35 per cent, to 50 per cent. — in some 
cases even more. 

A word will not be out of place regarding obvious advan- 
tages of these methods in setting correct rates. It is not un- 
usual to find piece or premium rates set by the usual guess- 
work methods that allow a man to earn $7.00 to $8.00 per 
day for much less return than represents a fair day's work. 
I have known of several cases where a piece rate was cut 
nearly in halves because the man was earning about $8.00 
per day. After the cut he still earned $8.00. Obviously the 
original rate was four times what it should have been. The 
work did not require skilled help and $4.00 per day would 
be a generous wage. Aside from this, the man was limiting 
output during the time he was making on the original rate. 
He doubled his output when the rate was cut. Had stop 
watch observations been made by a properly trained time 
study man, preferably one who was skilled in the trade 
under observation, this could not have happened. The re- 
sult of improperly set rates need not be discussed here at 



34 PRACTICE VS. THEORY 

length. They include dissatisfaction on the part of the firm ; 
the inevitable cut and continual dissatisfaction on the part 
of the men; limitation of output; increase of discontent and 
deceit and eventually labor troubles. The elimination of 
these troubles will save many times more each year than it 
costs to run a planning room. 

When a foreman sets, a rate, he estimates it by using day- 
work output as a basis. He adds something to it for luck 
and sets his rate. Actually the rate of day-work under or- 
dinary shop conditions as compared to bonus work under 
scientific conditions is i to 3 or 4 on the average ; some cases 
1 to 10 or even more. 

There are certain difficulties to overcome when establish- 
ing bonus in a plant accustomed to piece or premium im- 
properly set. These difficulties consist chiefly of a marked 
difference in the maximum earning power of a man based 
on a bonus rate set after an itemized time study, as com- 
pared to the arbitrary piece or premium rate. The preceding 
paragraph has explained in part what these differences are. 
Jn addition, however, to the difference in the ultimate day's 
earnings, more trouble is met with in trying to educate the 
workman to an entirely new viewpoint. This can best be 
explained by calling attention to the fact that what we pur- 
chase is a man's time and not his output. It is up to the 
organization to see that a fair output per day is realized. 
When this output reaches a fair average maximum, the 
extra remuneration is in the form of a bonus, the result 
being an increased daily earning. Comparing a differential 
bonus scale of prices, however, the tendency on the part of 
the man is to consider it only as a piece rate. To further 
illustrate this point, if we have a job that has been paying 
i;even cents (7c) a piece and the production has been about 
fifty pieces per day, the piece rate earning of the man is 
$3.50. If this method of payment is replaced with differ- 
ential bonus, the tendency is to compare the difference in 
earnings of the day for the last few pieces. The result is 
that the man feels he is being paid at only the rate of say. 



FREDERIC A. PARKHURST 35 

two cents (2c) a piece, losing sight altogether of the fact 
that he has been assured of his nominal day rate irrespec- 
tive of his production. 

The above mentioned troubles are not found where im- 
properly set piece or premium rates do not exist. Neither 
is there similar trouble in establishing bonus rate in a shop 
which has worked only under regular hourly or daily wage. 
■ One often has to contend with the natural antagonism of 
some men who feel that the installation of bonus is some 
means in disguise of further reducing their earning power. 
This objection, however, can readily be overcome after the 
men realize that the rates will be established correctly in 
the first place, and remain unchanged so long as the piece 
or job remains unchanged, in design, method or equipment. 
Of course guaranty not to change rates would as readily 
apply to piece or premium work under like conditions. The 
trouble, however, is that piece or premium work is usually 
priced arbitrarily and so results in unfair rates, both to the 
man and to the firm. Therefore, it is practically impossible 
to guarantee any permanency. 

B. Harmony, Not Discord 

This is the second element of the combination defined by 
Mr. Taylor. How often we hear the criticism that harmony 
is realized in almost all lines of business and that it has 
nothing whatever to do with, neither should it be particu- 
larly identified with, scientific management. If this is so, 
and if harmony is such a well-understood and common ele- 
ment, why don't we see more of it in the average manufac- 
turing or industrial establishment? The fact remains that 
in a great many instances, harmony is conspicuous by its 
absence. Many of the chief reasons for this condition can 
be traced directly to the case illustrated in the last few pre- 
ceding paragraphs. Its absence is often due to that great 
variable the personal factor. This is particularly so in large 
plants which have grown rapidly and abnormally. Their 
sudden growth has demanded the mushroom type of or- 



36 PRACTICE VS. THEORY 

ganization which must of necessity lack the refinement of 
one more deliberately planned. 

There are a great many factors tending to create discord, 
some of which require an immense amount of time to re- 
move. As far as the personnel is concerned, this can be 
handled and developed in the way previously referred to in 
this article. When that is accomplished the next move is. to 
inspire everyone with the policy that only the square deal 
will prevail. To' bring about this condition, extremely strict 
order of discipline must be maintained and the policy of the 
company clearly defined so that everyone can work in har- 
mony with it. Each member of the organization must be 
forced to realize the fact that everyone is employed to work 
for the company's interests, and co-operate and work in 
harmony with his associates. Discrimination of individuals 
must be absolutely prohibited. This latter dictum is one 
likely to be far-reaching in its nature. Men have to be 
trained to lay aside their personal likes and dislikes and to 
regard their work from an entirely different viewpoint. 
This is hard at first, but after they become accustomed to 
the new order of things and begin to realize the certain ad- 
vantage, it is as natural to work harmoniously as otherwise, 
and much more comfortable. 

One of the greatest disturbing elements in connection 
with building an efficient and harmonious organization is 
the one of poor pay. It is a mistaken idea on the part of 
many managers and heads of departments that they are 
earning money for the company and running their depart- 
ment cheaply by the employment of cheap help. This is as 
true of office employees as it is of the rank and file. The 
layman little realizes the actual difference between output 
per man as compared to large differences in pay per man. 
For example, many cases can be cited where a man earning 
$2.50 has an output which can be expressed by unity; by 
an expenditure of more money for sufficient supervision, 
proper maintenance of equipment, etc., plus extra incentive 
to the man for following instructions and putting up a fair 



FREDERIC A. PARKHURST T>7 

day's work, a production can be realized which may be ex- 
pressed by 3 or 4 and sometimes much more. 

The difficulties in the way of remedying this condition 
while promoting harmony are very many. This statement 
may seem strange, but it is nevertheless true. In many cases 
the greatest objection comes from those who are eventually 
to be directly benefited by this change of condition. The 
average shop man presents another stumbling block by con- 
sidering- his own particular work more or less his private 
asset, of which the firm should know little or nothing. In 
other words, he feels that the more dependent the firm is 
upon him for information, the more secure his position with 
them will be. The fact is lost sight of that promotion is 
often denied a man because through lack of organization 
and knowledge on the part of the firm, he is forced to re- 
main in a minor position. When data of each man's ability 
is in the hands of the firm, advancement can be made com- 
mensurate with his ability without in any way tending to 
disrupt or retard his work or that of his department. In 
order to bring about this condition and establish a self-sus- 
taining organization, each incumbent of important posi- 
tions, including heads of departments, should train and have 
immediately under him a successor competent to take over 
his duties and responsibilities at a moment's notice. This 
condition can pertain to a small organization as well as to 
a large one. A man may often fulfill the duties of several 
positions where the duties of one do not require all of his 
daily time. 

C. Co-operation, Not Individualism 

This element in a general way can be considered in the 
same manner as harmony. Individualism in the ordinary 
form of management can be likened to co-operation under 
scientific management in much the same way as individual 
effort among a body of men can be compared to well-trained 
and highly-organized team work. Our modern professional 
baseball team is probably one of the greatest examples of 
scientific management before the world today. The fact is 



38 PRACTICE VS. THEORY 

little realized by the thousands of enthusiastic fans who 
watch one of our league games. Great enthusiasm is often 
manifested over some startling or spectacular play on the 
part of an individual which may appear to be absolutely 
spontaneous. The truth of the matter is that the majority 
of such plays have been carefully worked out by long and 
tedious practice and intricate time studies. The result is 
that with the player on base and the ball in a certain part 
of the field, or in the hands of a pitcher about to be played, 
the success of the proposed play can almost invariably be 
predetermined. This has been brought down to an exact 
science. 

It may seem ridiculous to say that the modern battleship is 
handled and controlled by a planning department ; neverthe- 
less this is exactly true. The handling of a battery of large 
guns in record time and the percentage of hits which ten 
years ago seemed absolutely impossible, involves the co- 
operation of a great many different men. The use of highly 
perfected instruments, combined with the predetermined 
condition of the atmosphere, variations and speed of the 
wind, weight and condition of powder, etc., all enter into 
the problem. In the report of the battle of Santiago, our 
patriotic and enthusiastic populace marveled at the feats of 
gunnery and markmanship displayed by the United States 
battleships. The truth is that today it would be considered 
a most disgraceful exhibition. Only five per cent of the 
shots fired at Santiago reached the mark and at compara- 
tively short ranges. Today, under like conditions, from 
sixty-five to seventy-five per cent of the shots would reach 
their marks and at ranges mounting as high as eight or 
nine thousand yards, and at speeds double those involved 
in 1898. 

In industrial establishments like comparisons can be made. 
Investigation will show an immense amount of duplication 
between departments. Similar operations in like trades will 
be found to vary widely in method and more widely yet in 
time consumption. Each journeyman has his own particu- 



FREDERIC A. PARKHURST 39 

lar idea of how his work should be prepared, how his tools 
should be forged or ground, and the condition of the ma- 
terial with which he works. Thus these elements become 
great variables because the whim and biased notions of the 
individual make them so. Standardization of these elements 
greatly simplifies them. Lack of unity of purpose and ideals 
results in the individual limiting himself and his chances of 
advancement as well as limiting that most vital of all in- 
terests, his earning power. 

Complete co-operation and unity of men, methods and 
equipment will revolutionize the entire tone and capacity of 
a plant. Where departmental functions, both as a whole 
and in detail, do not thoroughly dovetail into a harmonized 
whole, friction and disruption will exist. It is a well-known 
fact that we are not today, as a rule, turning out the high- 
class, all-around mechanics that we did years ago. The 
reason for this is obvious, although the remedy for it is not 
so obvious to the layman. There can be no dispute over 
the fact that scientific management favors the apprentice, 
handyman and journeyman rather than the firm itself. 
When organized labor realizes what scientific management 
actually is, they will find they have much more to gain by 
co-operation and acceptance of its principles than they can 
hope to gain by any other method. This statement can be 
easily proved by investigating the plants working today 
under its form of management. 

It may be well here to cite a remark made by the superin- 
tendent of a large and well-established industrial plant in the 
East. In speaking to one of our noted efficiency engineers 
of the work which was being accomplished, he said that his 
firm would be thoroughly satisfied if the only benefit they 
realized from scientific management was the increased wage 
and higher moral standing - of their men and the attendant 
prosperity which would accrue from the change. This state- 
ment expresses a sentiment which many of the laboring 
class cannot acknowledge exists on the part of the manu- 



40 PRACTICE VS. THEORY 

facturer. Such sentiment is growing, however, and that 
the fact is not more fully realized by the working man is to 
be regretted. 

D. Maximum Output in Place of Restricted Output 

Reference has previously been made in this article to the 
ratio of production under ordinary management to that 
under scientific management. A great part of this is due, 
of course, to the change in organization, plant methods, etc. 
The balance is due to the increased effort and interest ex- 
hibited by the men, encouraged by a higher average of 
wage. The natural incentive on the part of the men is lack- 
ing unless all elements referred to are present. As soon as 
a betterment of condition has been realized, men are men- 
tally in a different attitude, and will naturally exert them- 
selves to earn the additional compensation. 

The demoralizing effect of incorrect rate setting cannot 
be over emphasized. It tends to promote a disposition to 
deceive and restrict output. Such a condition naturally 
breeds discontent and lack of confidence in the management. 
One must rely largely on the individual's tendency to better 
his own condition when the opportunity presents itself. 
When the man learns how to produce his maximum with 
the prospect of a definite and immediate reward, he finds 
more pleasure in his work. He is mentally in condition to 
aspire to do the best that is in him and he develops the 
natural pride which is more or less latent in everyone. 

E. Development of Each Man to His Greatest 
Efficiency and Prosperity 

This development comes as a natural result of the pre- 
ceding elements working in accord. The highly-trained 
and efficient men receiving a large weekly pay make better 
citizens than the inefficient and underpaid. They are en- 
abled to do better for their families, as to housing, clothing, 
and feeding them, and they are enabled to give their chil- 



FREDERIC A. PARKHURST 4 1 

dren better education. There are many children of today 
denied the education that belongs to them with the result 
that their entire after-life is handicapped. They are denied 
the advancement and opportunities which are more and 
more becoming subject to the individual's mental develop- 
ment. If the little red schoolhouse is to represent one of 
our chief constitutional pillars in which we take so much 
pride, it must be supported by a high standard of American 
citizenship. What this really means can only be fully ap- 
preciated by the study of home conditions in a largely for- 
eign community employing low-g'rade and comparatively 
ignorant help. The development of a healthy mind and 
body while young is the only possible mainstay to a cosmo- 
politan nation such as this United States is growing into. 
As efficiency will bring about the increase in wages, so it 
will ultimately result in the decreased cost of the necessities 
of life. In other words, when we become universally ineffi- 
cient, both individually and collectively, in all walks of life 
ranging from the farm to the banking house, our net return 
per capita is going to be greatly increased. 

We must make radical changes in most of our traditional 
ways of doing things and we must realize a new standard 
of ideals. This can only be brought about by a long and 
painstaking course of hard knocks and experience. Stu- 
dents of this subject should study it from the practical 
standpoint and by close detailed investigation of its actual 
workings. It is not in any sense a subject to be learned 
trom books, but one which must be learned from close 
contact with and thorough understanding of the personal 
element involved. Only in this way can the psychological 
conditions be fully appreciated and understood. 



LECTURE IV 
"put your house in order" 

Up to the present time only a small minority of foundry- 
men have taken up scientific management to any great ex- 
tent. This may, perhaps, be due to the fact that the litera- 
ture on the subject has been devoted almost exclusively to 
ether branches of manufacture. The foundry offers fully 
as large a field for conservation of materials and human 
energy as does the steel mill, machine shop, printing house 
or textile mill. 

The foundryman is probably more or less familiar with 
what is being accomplished through the application of the 
science of management to trades other than the foundry. 
He may not realize what the adoption of such principles 
would mean to his own particular business. In treating this 
subject the writer confines himself strictly to the practical 
side of the question based upon his own actual experience, 
as he believes that the science of management can be most 
clearly interpreted when so specifically treated. The limits 
of this paper will not permit much detail, but it is hoped 
that an interest, commensurate with possible results, may 
be aroused from the foundryman's point of view. 

The preliminaries necessary to getting "your house in 
order" measure the results you can obtain. There is much 
to be considered before the detail of reorganization actually 
commences. This fact is too often overlooked, and partial 
or entire failure follows, because the foundation did not 
contain the essential factors. These prerequisites involve 
both the owner or stockholders upon the one hand, and the 
organizing engineer upon the other. They may be consid- 
ered under the following heads : Owners' responsibilities 
require : 

A. An intelligent general knowledge of the science of 
management in theory and in practice. 

42 



FREDERIC A. PARKHURST 43 

B. An acquaintance with plants now running under such 
principles. 

C. A clear perception of their own plant conditions and 
organization in comparison with the more complex methods 
based upon the science of management. 

D. An understanding of the radical changes which must 
be made from the established conventions. 

E. A thorough investigation into the experience and 
qualifications of the organizing engineer. 

F. An absolute support and recognition of the authority 
of the organizing engineer, once he assumes his duties. 

G. A complete realization of the importance of the con- 
trolling factor, "time." 

The organizing engineer's responsibilities require : 

H. A preliminary inquiry into the business, plant, and 

owner's relations to same, as well as their conception of the 
science of management and their ability to see the installa- 
tion of such carried to completion. 

/. A report upon necessary changes which shall incor- 
porate recommendations and the probable improvements to 
accrue. 

/. A study of the personnel and plotting of the organiza- 
tion. 

K. A determination upon a method of procedure which 
shall expedite the reorganization along lines consistent with 
best permanent results, a minimum cost, and relief of great- 
est elements of inefficiency as soon as possible. 

L. The establishing of a self-sustaining organization, 
supported by clearly defined ideals, written instructions, au- 
tomatic reward for efficient work with the personal factor 
a paramount one. 

The above items cover the chief factors which demand 
serious consideration. Let us discuss them individually. 



44 PUT YOUR HOUSE IN ORDER 

A. An owner decides in an enthusiastic moment to put 
his plant under the new science of management. It is not 
sufficient. Such a decision should only be reached after a 
knowledge of indisputable facts and much calm reflection. 
He is making an investment, which, from first to last, will 
use a goodly amount of money and time. Suppose that he 
has an established prestige and a profitable business which 
has been in successful operation for years. He must not 
jeopardize it for an experiment. Of course, there are many 
cases where the financial statements of a company's condi- 
tion show a profit where quite the reverse is true; but for 
argument's sake, let us assume that a concern is prosperous 
and has been "making money" for a majority of the years 
it has been in existence. That fact does not prove that it 
is going to continue to do so. Present-day business condi- 
tions are rapidly changing. Our old margins of profits are 
disappearing. New factors are constantly springing up 
within the field of competition. Today it is a new tariff 
schedule, tomorrow a wave of unrest in the Labor world. 
Furthermore, we are getting more and more wasteful. We 
have enjoyed too much prosperity. Labor gives us less 
work per hour, paid for at an ever increasing price. Why ? 
We have grown too big to watch the small details. We 
have grown too fast to take the time to train skilled help. 
We have lost the personal touch which was the small own- 
er's greatest asset. The destructive result is inefficiency; 
and it is a germ which continues to grow and multiply until 
its prevalence ruins a company. Only drastic measures will 
eliminate it. 

The owner must consider his problem dispassionately. He 
is facing the inevitable if his competitors grasp at the solu- 
tion first. What is the answer? It can be found by those 
methods which develop the personal touch, grasp of detail, 
control of materials, accurate knowledge of all the variables 
affecting any business and maximum prosperity through 
high wages for the rank and file. 



FREDERIC A. PARKHURST 45 

B. That this answer has been proved can be established 
by a visit to many plants running under the science of man- 
agement. There are enough of them to afford ample op- 
portunity for the study of its workings under prevailing 
manufacturing conditions. They are old, established plants, 
prosperous before the installation of such methods, bur 
doubly so now. That does not necessarily mean a doubling 
of the net profits, though such is true in some cases. An 
increased prosperity is realized through several factors : 

(a) Greater profits. 

(b) Satisfied customers, hence more staple and steady 
source of orders. 

(c) Less nomadic and better satisfied labor due to higher 
wages and better' shop conditions which results in an absence 
of labor troubles. 

(d) Ability to safely and intelligently meet fair competi- 
tion through efficient manufacturing methods and accurate 
cost records. 

It is hoped that each person interested will verify for him- 
self the conditions existing in plants running under scien- 
tific management. A day spent in each, of several so or- 
ganized, would be of advantage to any owner. Such firms 
rather invite a study of their conditions. The owner con- 
templating the adoption of methods founded upon the prin- 
ciples of scientific management, owes to himself and his 
associates all the advantages that can come from an intelli- 
gent study of these methods in actual operation. 

C. That you may compare the ordinary foundry with its 
possibilities under correct methods, let me draw you a pic- 
ture of a foundry as it actually appears under such methods. 
The first impression one receives is that no one, from the 
office boy to the laborer, seems in a hurry, yet each is busy. 
This is quite contrary to imagined conditions. Though 
there is no apparent hurry, each one has plenty to do and 
everything is moving along at a high speed. The individual 
has specific duties, and his written instructions cover every 



46 PUT YOUR HOUSE IN ORDER 

detail of his work. He makes few false moves. He is paid 
more than he could get in any shop run under old lines. 

There are operations being performed at an unheard of 
speed. For example, here is a man making 66o*cor5es per 
day when formerly 1 50 was a day's production. There are 
90 crank cases a day from one pattern that the best foundry 
and pattern shop talent said could not exceed 40. Castings 
are poured under pyrometer control, material taken to and 
from the men. One sees specially trained men, not molders, 
pouring difficult molds successfully. 

The time study men are making analyses of operations 
on a job and timing each with a stop watch. Do the men 
object? They did at first, but they receive a bonus of 25 
per cent of their wages while they are being timed and they 
realize that when the correct time has been established they 
make more money on that job because of the bonus attached. 

Now let us look at the indirect elements which are re- 
sponsible for this production and the smooth running of 
the shop. Chief of these is the planning room, or "brains 
of the shop." The several important functional men em- 
ployed through and about the shop are : 

1. Production clerk. 

2. Route clerk. 

3. Order-of-work clerk. 

4. Schedule clerk. 

5. Time study foreman. 

6. Material foreman. 

The planning room organization, combined with their 
shop representatives, remove much of the detail that is or- 
dinarily delegated to shop foremen and gang bosses. The 
first mentioned few men are specially trained to several 
branches of the work necessary to the official operation of 
a plant. They are all specialists. Their duties are carefully 
defined and responsibility for every detail is definitely 
placed. 



FREDERIC A. PARKHURST 47 

Briefly, the work of the planning room staff is as follows : 

1. The production clerk is the head of the planning 
room. He is held responsible for those under him and their 
work. He sees to the proper distribution of charges of all 
labor routed to the shops. He supervises the ordering of 
material; also cost and stores records and other general 
details. 

2. The route clerk routes all work to the shops by means 
of work orders and distributes this work to the proper 
benches, machines or men by means of the planning board, 
a duplicate of part of which is in each department. He does 
not, however, have anything to do with the "order of work" 
or of the records of its condition in process. 

3. The order-of-work clerk is responsible for the cor- 
rect processing of all work in the shops and the maintenance 
of shipping date schedules. He plans the order in which 
operations at each bench or machine are performed so as to 
finally bring the component parts of the work for each order 
through on a given date. 

4. The schedule clerk keeps the process schedule, issues 
the daily schedule and job tally sheets to the shop, and in 
conjunction with the order-of-work clerk checks and follows 
up details of work in process. These two men also control 
the orders for overtime work that may from time to time 
be necessary to maintain shipping promises. 

5. The shop methods are controlled by the time study 
foreman. He is responsible for the time study work. This 
includes the analysis of all operations, the fixing of 
times, computation of bonus and the instruction of the 
employees until they can meet the bonus production 
called for. He is also responsible for the instruction cards. 
These cards are the final detail record of the standardized 
practice as finally determined after the study of conditions 
and completion of time studies. 

Part of the times are covered on the standard time sched- 
ule of sub-elemental operation times. These times apply 
to all jobs. Only a few of the operations in a new job have 



48 PUT YOUR HOUSE IN ORDER 

to be timed. The bonus for a given production is obtained 
directly from the author's standard differential bonus sheets. 
These sheets show the bonus figures for any one of fifteen 
classes of labor for any production. 

6. The material foreman, under orders from the planning 
room, or through the routing specified on the work orders, 
controls the movement of all material in process. This ap- 
plies to everything. The workmen or their helpers are not 
allowed to go after the material they are to use. Neither 
are they allowed to deliver it to the next destination after 
they are through with their part of the work. In a foundry 
this applies to delivery of sand, chills, wire, nails, core 
plates, flasks, cores, metal (pouring gang), movement of 
castings, etc. In fact, all material to be moved is in charge 
of the material foreman. This applies from the time it is 
ready to move the first time until it has reached its final 
destination. 

D. It can be readily seen that the division of responsibi- 
lities as above outlined must tend to much greater plant 
efficiency of operation than can be realized by holding each 
foreman responsible for his part of all these things. The 
development of an organization as above outlined must of 
course impress the older regime as more or less radical. 
This is obvious. At the same time, the method of procedure 
affects the smoothness of operations during the period of 
transition. The responsibility for this is up to the organiz- 
ing engineer. 

E. We come now to the selection of a competent en- 
gineer, expert in the use of methods based upon the prin- 
ciples of the science of management. He should be a man 
of varied shop experience and have a thorough knowledge 
of business. He must know men and be able to appreciate 
the psychological influence in dealing with them. The en- 
tire problem is one of education ; and success can only be 
obtained through a capacity which will control the ever- 
varying human factor while the new order is being estab- 
lished. 



FREDERIC A. PARKHURST 49 

F. The successful issue lies with the engineer, but the 
management must support his authority to the limit. The 
owner cannot be too careful in the choice of an expert, but 
once a choice has been made, stand firmly by him. The 
moral effect of this attitude will remove half the obstacles 
ordinarily met. 

G. The element of time is the essential agent which pro- 
duces results. The length of time required to put any given 
plant on a sound basis of efficiency can be but roughly esti- 
mated. Each plant offers its own problems and each prob- 
lem must be met and disposed of according to varying cir- 
cumstances. Many indirect influences have a heavy bearing 
upon the situation. 

As a general proposition, the small plant will require at 
least between two and three years. The larger and more 
complex the plant, a correspondingly longer time is neces- 
sary. What three years would do for one concern would 
take six to do in another. The tendency is too often to rush 
the work. Many failures have resulted from just this cause. 
Owners contemplating the installation of the new methods 
should bear this in mind and profit by the experience of 
those who have been successful in their results. Build the 
foundations slowly if need be, but absolutely surely. 

H. We have contemplated the chief points to be consid- 
ered by the owner. The organizing engineer assumes the 
larger responsibility when he undertakes the successful re- 
organization of any plant. He should make a careful in- 
vestigation of the existing executive management, the offi- 
cial and shop personnel, the physical plant and methods. It 
is not safe to assume that because a plant is not run upon 
recognized scientific principles that it is inefficient. If this 
fact is overlooked, the organizer may find a condition where 
his services are not needed to make material improvements. 

There are some lines of business which, on account of 
their simplicity or peculiarities, can be little improved. In 
any case, conservative, sane and explicit information as to 
the possibilities should be given. The organizer must be 



50 PUT YOUR HOUSE IN ORDER 

sure that the principals thoroughly understand all that is 
involved and are in a position to see the changes carried out. 

/. When a complete understanding has been reached with 
the owners, a preliminary report should be submitted, deal- 
ing with the unusual conditions or glaring inefficiencies. 
Immediate attention should be directed to such and a remedy 
for same found at once. By prompt recognition of such 
details, not only may large savings begin, but they may 
make the installation of the new methods pay for their 
own expense. 

This item of cost is in many cases an important one. A 
realization of the fact by the engineer often enables him to 
carry on the work on a scale which will not prove a burden 
to his client. In cases where the ultimate savings are doubt- 
ful, in consideration of the cost of the change, the facts 
should be so clearly stated that a misunderstanding on the 
part of the client would be impossible. Such cases will be 
rare. In most cases the final, direct and indirect savings 
will be many times the cost of installing the modern 
methods. Furthermore, the gain is a permanent one and 
the return will be felt for years. 

An efficient and permanent organization is as much if 
not decidedly more of an asset than so much plant. An- 
drew Carnegie once said that could he retain his organiza- 
tion, the loss of his plants would not be fatal; he could in 
a short time replace the latter and outstrip his competitors. 

/. The next step for the engineer is to thoroughly study 
the available human material and plan his organization to 
use it. In a plant of any size there is enough material to 
fill all requirements. The men will have to be trained, 
tried out, shifted and tried again. It will be the exception 
who is not finally placed satisfactorily. A great asset of 
the old employee is that he does not need to be taught the 
details of the particular business. Other requisites being at 
all equal, he is the better choice. 

The organizer must exercise extreme care, patience and 
tact in establishing the new line-up. He has to contend with 



FREDERIC A. PARKHURST 5 I 

petty jealousies, age, term of services and similar obvious 
conditions. One of the most difficult situations is the neces- 
sity for changing the incumbents of more important posi- 
tions. This is especially so in cases where he may have to 
put a man into a place of less importance, but which he is 
pre-eminently fitted to fill. 

There is an old saying, "A new broom sweeps clean," but 
the writer has never found it necessary to prove the adage. 
There are cases where one is obliged to remove an old em- 
ployee, but it is the exception rather than the rule — if the 
reorganization is carefully planned and built up. 

Just here a word about the organization record might 
not be amiss. The record contains a complete set of all 
instructions covering in detail the duties of each member 
of the organization. A new incumbent in any position needs 
but to study them to become thoroughly familiar with his 
duties. Too much stress cannot be laid upon the importance 
of these records. They assure the maintenance of details 
and routine long after the organizer has completed his 
work. They are an asset to the firm because they show how 
and why each detail is handled in a certain way. No man 
needs miss promotion because no one else can step into his 
job. Neither can an employee "corner" his services because 
he alone knows his particular part of the work and so thinks 
he is indispensable. Such a man cannot be dispensed with 
too soon. This record is for reference of all department 
heads and they are invited to use it freely to familiarize 
themselves with the new order as the work progresses. 

K. The order of procedure in working out detail in 
methods depends wholly on the local plant conditions. 
There can be no hard and fast rule. Each problem must be 
met in a different way. No two plants are suffering from 
exactly the same measure of the same elements of ineffi- 
ciency. One plant, though very inefficient, may have a 
highly developed stores system. Another may have no 
stores system at all. One plant may know its costs and 
another not. A congestion of orders may be a great handi- 



52 PUT YOUR HOUSE IN ORDER 

cap and again the difficulty lies in an inability to get ma- 
terial when wanted. All these combinations have to be 
treated as they occur. Each kind of business offers its own 
likely chances for inefficiency. One of the greatest elements 
in any business is the labor proposition. 

No matter how good your plant, how economical your 
furnaces, how much material you may have, the man is 
what counts. Plant, furnaces, materials! Absolutely use- 
less without the human agency. As stated before, labor is 
giving us less work per hour for a steadily increasing wage. 
This condition is going to grow worse for some time to 
come. The reasons are too well known to need discussion. 
We must consider the remedy. 

L. "Put your house in order." Build up an adequate and 
self-sustaining organization. No iron-clad system and 
fixed detail of method can be generally applied. The true 
science of management lies not in a definite set of forms or 
?. standard line of procedure. 

The fundamental principles remain constant. The sys- 
tem, forms, etc., are but a means to an end. The entire 
combination, to be effective, must realize certain results. 
.In addition to a self-sustaining organization supported by 
written instructions, subject to revision to suit ever-chang- 
ing conditions, we must automatically reward each employee 
for work well and efficiently performed. He must not be 
left to his own devices. All the elements of his work must 
be under absolute control. To do this the personal factor 
must be recognized as paramount. This condition can be 
realized by fair and competent management, and the co- 
operation of the rank and file will be obtained permanently. 
Give a generous bonus in addition to the day wage, for a 
good day's work well done. You will have a better satisfied 
and higher standard of employee. Your house will be in 
order. 



LECTURE V 



FIRST ESSENTIALS 

1-A. Preliminary Investigation. 
1-B. The Form of Organization. 
1-C. The Organization Record. 



This lecture will discuss the above subjects, following closely 
Chapter I of the text. Examples of experiences with other plants will 
also be brought in to emphasize important points. 



53 



LECTURE VI 



DEPARTMENTAL FUNCTIONS 

2-A. Functions of the Sales Department and Counting Room. 
2-B. Functions of the Engineering Room. 
2-C. Functions of the Drafting Room. 

This lecture will treat of the above subjects, closely following 
Chapter II of the text. 



54 



LECTURE VII 



DRAFTING ROOM METHODS 

VII. Drafting Room Instructions. 

VIII. Instructions for Drawing and Sketch Indexes. 
XXXI. Shop and Drawing Boys' Instructions. 



This lecture will discuss the several instructions referred to above, 
which instructions form part of the Appendix of the text. The object 
of reviewing instructions is to enable the student to understand the 
way in which instructions are drawn up in detail to cover the functions 
of certain departments. 



55 



LECTURE VIII 



PLANNING ROOM 

3-A. Planning Department. 

3-B. Duties of the Superintendent. 

3-C. Functions of the Planning Department. 

3-D. The Production Clerk. 

The above subjects will be discussed, following closely part of 
Chapter III of the text. 



56 



LECTURE IX 



PLANNING ROOM INSTRUCTIONS 

X. Production Clerk's Instructions. 
XL Planning Department Monthly Report. 



The above instructions will be covered in detail, following the 
Appendix of the text for the instructions mentioned. 



57 



LECTURE X 



planning room (continued) 

3-E. The Shop Engineer. 

3-F. The Stores Clerk. 

3-G. The Cost Clerk. 

3-H. The Route Clerk. 

3- 1 . The Order-of-Work Clerk. 

3- J. The Shipping Clerk. 

3-K. The Receiving Clerk. 

3-L. The Time Clerk. 

3-M. The Schedule Clerk. 



The above subjects will be discussed in continuance of the de- 
scription of the detail work handled by different functionaries located 
in the planning room, or working in conjunction with it. This lecture 
will follow that part of Chapter III of text indicated above. 



58 



LECTURE XI 



planning room ( continued) 

3-N. The Factory Mail System. 

3-0. The Time Boy. 

3-P. The Inspector. 

3-Q. The Stores Keeper. 

3-R. The Move Material Boss. 

XXXI. Inspector's Instructions. 



This lecture will discuss the above subjects, completing Chapter 
III of the text not already covered. This lecture will also include a 
discussion of Inspector's Instructions XXXI, forming part of Appen- 
dix of the text, page 281. 



59 



LECTURE XII 

ROUTING AND CONTROL OF WORK 

4-A. The Routing of Work Through the Shops. 
4-B. Symbols (For further reference see "Symbols" published by 
the author in early 1917). 

The above subjects will be discussed, following closely part of 
Chapter IV of the text. 



60 



LECTURE XIII 



ROUTING AND CONTROL OF WORK (continued) 

4-C. The Functions of the Material Boss. 

4-D. The Functions of the Order-of-Work Clerk. 

4-E. Gang Bosses. 

4-F. The Speed Boss, 



This lecture will complete the discussion of the remaining part of 
Chapter IV of the text. 



61 



LECTURE XIV 

ROUTING AND CONTROL OF WORK (continued) 

XIV. Anticipating Requirements both as to Rough Material, 

Machining Operations and Assembly. 
XV. Order-of-Work Clerk's Instructions. 
XVI. Movement of Batches in Installments. 
XVII. Route Rack Signals. 



This lecture will be confined to discussing the details of the in- 
structions mentioned above, forming part of the Appendix of the text. 



62 



LECTURE XV 



STORES, LABOR AND COST 

5-A. The Creation of a Stores. Department, the Methods of 
Classifying and Housing all Material (Rough or Fin- 
ished) not in Process of Manufacture, and the Order- 
ing of Stores either to be Purchased Elsewhere or to 
be Made in the Shops. 

5-B. The Perpetual Inventory or Stores Ledger, showing 
how it is kept up to date and checked to always agree 
with the Actual Stock. 

The above subjects will be discussed following the outline as given 
in part of Chapter V of the text. The student is referred to the 
author's "Predetermination of Prices" for a further insight into the 
controlling elements necessary in connection with costing. 



63 



LECTURE XVI 

stores, labor and cost (continued) 

S-C. The Means used to get Correct Returns for all Times 
expended on work, whether as expense or as productive 
Labor, including Operation Times. 

5-D. The Combined Cost and Route Sheet, and the Methods 
Employed to Distribute and Collate all Material and 
Labor Charges as well as Overhead Expense. 

This lecture will complete the discussion of this subject as out- 
lined in Chapter V of the text. 



64 



LECTURE XVII 

INDIRECT COSTS 

4- A. Expense Symbols. 

4-B. Expense Distribution. 

4-C. Distribution of Burden. 

4-D. Erroneous Methods of Distribution. 

4-E. Differential Process Rate Method. 

4-F. Undistributed Burden. 

The above subjects are treated in detail and reprinted complete from 
Chapter IV of the author's "Predetermination of Prices." Figures re- 
ferred to have been omitted and the student is referred to the above 
mentioned book for further information. 

INDIRECT EXPENSE 

The third element of true cost presents a more intricate 
problem to solve, because the items of indirect costs are 
less easy to determine and control than the direct items 
of labor and material. The direct items are incurred by 
a specific job and charged to that job, but the indirect 
items are incidental to' all jobs as a whole, since they cover 
administrative, financial, sales and operating outlay. The 
majority of the indirect expense must remain nearly con- 
stant irrespective of the volume of business. A small part 
of the expense is a variable and can be controlled as neces- 
sity arises. To separate the variable or partly controllable 
factors from the more constant factors, it is essential to 
make a comprehensive analysis of all indirect expense. 
When such an analysis has been made the need of adopt- 
ing a differential process rate or differential burden method 
of distribution will be obvious. 

4-A. Expense Symbols 

A typical expense distribution chart is shown in Fig. 
1 6. The figure shows a chart somewhat amplified and 
more complete than the ordinary business would require. 
The amplification is purposely carried out to make the 
application more general and to better illustrate the method. 

65 



66 EXPENSE SYMBOLS 

For convenience, a typical list of X accounts, showing the 
subjects they cover, is given. The following X symbols 
should only be used in combination with the plant symbol 
A, B, C, etc., or a department symbol 1A to 1Z. (See 
Fig- i 5-) 

XI. Salary of managers, superintendents, department 
heads. 

X2. Clerical wages. 

X3. Other labor. 

X4. Supplies. 

X5. Maintenance of buildings and structures. 

X6. Maintenance of equipment, furniture and fixtures. 

Subdivided by machines, etc. (See Table I.) 
XT. Care of plant (AX7) or department indicated. 
X8. Miscellaneous expense, not supplies. 
X9. Miscellaneous small tool expense. 
X10. Experimental and test expense. 

Xll. Fuel. 

X12. Maintenance of electrical equipment. 
X13. Maintenance of air compressors and piping. 
X14. Maintenance of boiler, stacks and accessories. 
X15. Maintenance of steam and water piping outside of 
boiler and engine room. 

X16. Maintenance of oil pumps. 

X17. Maintenance of heating system. 

X18. Advertising. 

X19. Traveling expense. 

X20. Maintenance of motor cars and trucks. 

X21. Pattern and flask expense. 
X22. Sand. 

X23. Injuries to employees. 
X24. Acetylene expense. 
X25. Inventory expense. 



FREDERIC A. PARKHURST 67 

X26. Crucibles and pots. 

X27. Replacement of stock chills. 

X28. Electricity purchased outside. 

X29. Gas. 

X30. Freight and express. 

X31. Defective material and workmanship, and main- 

tenace of contracts. 
X32. All bad work expense not belonging- to X31. 
X33. To X49 inclusive may be used to cover any specific 

needs of a business. 
X51. Legal expense. 
X52. Insurance. 
X53. Taxes. 
X54. Depreciation. 
X55. Interest. 
X56. Oxidation. 



Each of 
these groups 
have numbered 
items similar 
to XI to X56 
inclusive. 



General Expense 

GAX. General administrative expense. " 
GBX. General sales expense. 
GCX. General comptrollers and fi- 
nance expense. 
GLX. General laboratory expense. 
GOX. General operating expense. 
GPX. General purchasing expense. 

It should be noted that X32, bad work expense, may 
include bad accounts under GCX32 and unearned burden 
under GBX32. This list is only typical and suggestive. 
The division of the burden should be sufficiently complete 
to cover all of the divisions of expenses desired. Always 
use one sequence of symbols. To properly summarize ex- 
pense, we must be able to show the different symbols at 
the left of the sheet and in each department column to the 
right interpolate figures that apply to each department and 
for each expense symbol. Each X symbol means the same 
thing all the way across the sheet. Many departments will 
use only a few of these numbers, while others will use per- 
haps half or more. 



68 DISTRIBUTION OF BURDEN 

4-B Expense Distribution 

Cost sheets are opened for each department. Each col- 
umn of each department's set of sheets is devoted to the 
X symbol used by that department. The end of the month 
the sum of these sheets drawn off by X numbers is posted 
to the indirect expense symbol summary sheet illustrated 
in Fig. 15. 

The vertical footings of the indirect expense symbol sum- 
mary sheet represent the total indirect expenditures for each 
department for the month. The cross additions of each 
X account represents the total expense for each X sym- 
bol for each month. The vertical footing of the extreme 
right-hand total column must agree with the cross-footing 
of the totals at the bottom of the sheet. 

From the analysis sheet above described (Fig. 15) the 
total departmental expense for each period, weekly, monthly, 
quarterly or yearly, is determined. It is not sufficient, how- 
ever, to prorate these departmental total expenses by means 
of a burden without separating or further distributing item 
X6 (Maintenance of Equipment). It is possible that in cer- 
tain kinds of business or in a plant having but little machin- 
ery, or perhaps apparatus of but one size or type and costing 
approximately the same, the sum total of the departmental 
expenses would give a distribution close enough. This con- 
dition does not ordinarily obtain, however, so it becomes 
necessary to separate the equipment burden, and recognize 
the wide range in the cost of operation and expense incident 
to the various tools and apparatus. 

Each piece of machinery, equipment or work point should 
have its individual burden or differential process rate deter- 
mined as in 4-D. 

4-C. Distribution of Burden 

Table I illustrates equipment expense summarized by 
months and covering one year. The amounts opposite each 
machine symbol represent the total monthly equipment 
charge made up of the items listed in the preceding para- 
graph, plus X6 expense charges. These totals, divided by 



FREDERIC A. PARKHURST 69 

the nominal number of hours for each machine, represent 
the machine rate or burden. This nominal rate is determined 
by assuming that each machine should operate on a fair aver- 
age basis of so many hours per month or year. The class of 
business, of course, governs how this is determined. Let us 
take for example a plant running one shift of 10 hours, 
based on 300 working days per year. The normal full 
working capacity would then be equivalent to 3000 machine 
hours per year per machine. It cannot, of course, be fig- 
ured that on an average each machine will work the full 
3000 hours. The records of the business will indicate what 
per cent is a fair figure to use, in determining how many 
hours to divide for each month into the total machine ex- 
pense, to determine the machine burden per hour. The 
same basis is used where a plant runs 24 hours divided into 
several shifts. 

On a basis of 3000 hours maximum per year, or 250 
hours per month, we can assume for illustration that each 
machine should average an operating time of 80% or 200 
hours per month. This 200 hours divided into the total 
machine expense (see 4-B) represents the machine hourly 
burden. 

It may be well to mention at this point that in the event 
any or all of the machines are working their full allotted 
time, the actual direct hours can be divided into the expense 
for that period. Some firms make no allowance for less 
than 100% capacity, but use the full number of yearly hours 
as a basis. On the other hand, if the machines operate 
less than the fair average amount of time, we cannot use a 
higher burden by dividing each month's cost by a greatly 
reduced number of hours. If this is clone, the result will 
be an excessive burden per hour. It is not necessary, of 
course, to always figure the 8o>% or full running time used 
in the example above. Some classes of equipment or some 
kinds of business might make it desirable to use a some- 
what smaller percentage, and vice versa. In the event, 
however, that only half of the accepted percentage was run 
on a machine, or a lot of machines for a period, it would 



7 o 



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FREDERIC A. PARKHURST 



71 



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X6 ANALYSIS 



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FREDERIC A. PARK HURST 



73 



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FREDERIC A. PARKHURST 75 

not be fair to charge against cost, double the amount of 
burden. The disposition of undistributed (or unearned) 
burden is discussed in 4-F. 

The limiting of the machine hour burden or other burden 
rates to a maximum amount, which must not be exceeded, 
applies equally to departmental or other burden distribution. 
In the event that a plant is running very slack and pro- 
ducing large amounts of stock, the use of the actual burden, 
for low capacity, would result in an excessive cost and a 
false inventory value. It is not fair or equitable to use fig- 
ures so obtained as part of the inventory. If the undis- 
tributed burden is of such proportion that it offsets the 
profit on the amount of work done for the period, it is en- 
tirely a general business loss and one which the writer con- 
tends should ordinarily be shown as a sales expense. In 
making such a statement, it is realized that general condi- 
tions would have to be taken into consideration and allow- 
ances made for "seasonable" variation in sales, spirit of the 
times, etc. 

When the burden chargeable to machines has been de- 
ducted, the balance of the departmental expense must be 
distributed on a basis of so much per direct hour. This 
is determined by dividing the direct hours departmentally, 
as shown by the operating statement, into the indirect ex- 
pense, after substracting that part prorated as a process rate 
or pound burden (as some foundry departments should be 
prorated). These burdens, except the pound burden, should 
all be distributed on a productive hour basis. 

Occasionally one will find departments which will require 
a still different basis of prorating. For example, in a foun- 
dry where certain of the department expenses and costs of 
operation are directly in proportion to the weight handled, 
such departmental expenses must be prorated on the pound 
burden basis. Other foundry indirect expense, however, 
should be prorated at so much per direct hour. A complete 
operation anlysis makes such facts evident at a glance, and 
the indirect expense can be separated both by items and 
departments, so as to isolate those which must be distributed 



y6 DISTRIBUTION OF BURDEN 

by one method from those which must be distributed b; 
another method. It is axiomatic that no one method can 
give correct results in a business of any size, where one has 
a great variety of product or has several departments and 
a variety of equipment. 

After the indirect expense distribution has been worked 
out to show the actual amount of money for each depart- 
ment prorated against each order group, these amounts 
should be posted to the operating statement (Fig. 16). 
Each order group should also show departmentally the bur- 
den rate figured for the period. All of these figures appear 
in the third section of the operating statement entitled "In- 
direct Expenses." Fig. 16 does not show the various rates 
of burdens for want of space. It should be understood, 
however, that the differential process rate is the correct 
method to use. Under each order group there may, and 
probably will be, several burden rates. These should be 
expressed as departmental hourly burden, or process rate 
burden, or pound burden rate, or possibly a general expense 
burden rate and a sales expense burden rate. Ordinarily 
the writer believes in including the general and sales ex- 
pense in the total departmental burden, so as to have as few 
rates as possible. All of the several hourly burden rates 
may be added to the machine burden rate, or process rate, 
to get one total hourly burden rate for each machine or 
process point. Any pound or piece burden rate would, of 
course, remain separate. 

In distributing burden, the orders (F) covering better- 
ments and additions to factory, land, etc., and the orders 
(P) covering additions and betterment to plant equipment 
each carry their proportion of burden. It should be borne 
in mind that work on these order groups should be con- 
sidered productive, or direct labor, as far as the depart- 
ments are concerned that do the work. They should carry 
their burden just as though they were made on an order 
chargeable to a customer. It is sometimes desirable, how- 
ever, to use a burden rate which does not include the mini- 
mum profit factor for the F and P orders, so as to hold 



FREDERIC A. PARKHURST JJ 

down the increase in the property account and not show an 
excessive asset. After deducting any burden so prorated to 
the F and P orders, the remainder of the departmental 
burden is apportioned to the main order groups. 

When the amounts covering the indirect expense pro- 
rated to the various order groups, departmentally, have been 
distributed, these total amounts are carried out to the A, 
B, etc. order totals column (see Fig. 16) to the right; and 
into the grand total column at the extreme right of the 
operating statement. The grand total indirect expense 
transposed into the bracket at the right completes the second 
and last main item to compose true costs. The sum of the 
direct cost plus the sum of indirect costs equals true costs, 
and balance with the control accounts indentified by depart- 
ment symbols. To summarize : The department expense 
sheet, with a column devoted to each expense symbol affect- 
ing that department, gives the summary per month. This 
summary is prepared so as to get departmental, machine, 
process and pound burden amounts of expense so that the 
differential process rates can be determined for that period. 
To repeat, for emphasis, these rates must be determined 
by using as a basis a fair number of productive hours for 
the period based on the plant conditions. Rates beyond this 
fair average must not be used if excessive, thus giving a 
false cost. An undistributed burden should be considered 
a sales department expense. The sum of the different de- 
partmental burdens represent one total amount (in dollars 
and cents) for the period. This amount is itemized by 
order groups and appears as a summarized distribution on 
the operating statement (Fig. 16). 

4-D. Erroneous Methods of Distributing Indirect 
Expense 

The most common methods of distributing burden are 
by percentage, by flat hourly rate or by straight pound 
rate as used in the average foundry. The percentage basis 
of distribution is perhaps one of the most common, and 
also one of the most unreliable methods possible to con- 
ceive. For argument's sake, assume that a burden fixed on 



78 DISTRIBUTING INDIRECT EXPENSE 

the percentage basis is 100% of the direct wages, then a 
distribution of 6 cents per hour burden to a 6-cent appren- 
tice is made, a burden of 20 cents an hour to a 20-cent man 
or 40 cents an hour to a 40-cent man. The true facts of 
the case show that it costs fully as much for floor space, 
heat, light and superintending for the apprentice as for the 
20-cent, 30-cent or 40-cent man. The cost of supervision, 
wear and tear on tools and other equipment is probably 
more in fact for the low-priced help than it is for the 
higher paid journeyman or skilled workman. On a per- 
centage basis, the apprentice boy's work bears only a small 
part of the burden which he actually incurs, while the 40 
cents an hour skilled workman's job is being charged with 
more of the burden than he incurs. The percentage basis 
of distribution takes no cognizance of the machine hour 
rate, which distributes a few cents an hour on an inexpen- 
sive tool and possibly a dollar or two on large tools. With 
this variable undivided, the percentage distribution is fur- 
ther thrown out of balance, so that any figures obtained by 
the use of percentages are most unreliable. 

To further illustrate the argument, assume that a burden 
of 100% is what the percentage figures show, which means 
that for the various rates mentioned, the following cost, 
exclusive of material, exists. 

$.06 per Hour $.30 per Hour $.40 per Hour 



10 hours $.60 $3.00 $4.00 

100% burden 60 3.00 4.00 



Total $1.20 $6.00 $8.00 

Another erroneous method of distribution is the blanket 
rate based on productive hours. Here is an error not so 
glaring as the percentage basis, but one which also fails to 
take into consideration the variance of the burden due to 
the different equipment involved. Neither does it take into 
consideration the fact that part of the burden should be 
distributed on one basis and part on another basis. Using 



FREDERIC A. PARKHURST 79 

the same examples as given above, but prorating at say 30 
cents per hour burden, the result shows below. 



$.06 per Hour $.30 per Hour $.40 per Hour 



10 hours $.60 $3.00 $4.00 

Burden at $.30 3.00 3.00 3.00 

Total $3.60 $6.00 $7.00 



The wide difference in the costs, exclusive of material, 
shown by the two preceding sets of examples illustrates 
that there is something radically wrong with one method, 
at least. Now let us assume the three conditions under the 
method of distribution, being described herein. A correct 
departmental burden and a machine hourly burden have 
been determined by analysis. Assume further that the de- 
partmental burden is 12 cents per hour and that the work 
is being done on a machine with a burden of 40 cents per 
hour, a cost comparison would stand as follows : 





$.06 per Man 


$.30 per Man 


$.40 per Man 


10 hours labor 


$ .60 


$3.00 
4.00 
1.20 


$4.00 


10 hours machine rate. 
10 hours dept. rate 


4.00 

1.20 


4.00 
1.20 


Total 


$5.80 


$8.20 


$9.20 



In considering the last problem, it should be borne in 
mind that the department is operating while the job is 
being processed ; likewise, the machine time shows that the 
departmental and machine rate for the same number of 
hours spent on that job must of necessity be the same 
whether the job is done by a 6-cent, 30-cent or 40-cent an 
hour man. Of course, under the best type of manage- 
ment, a 40-cent man is not put on a 6-cents-an-hour job, or 
vice versa, under usual conditions. Any concern, however, 
employing a large number of men is likely to find during 
periods of business depression that it is necessary to use 
a higher priced man on work requiring less skilled labor, in 



80 DISTRIBUTING INDIRECT EXPENSE 

order to keep the man employed. In many such cases the 
labor charged to the job is charged at the rate which the 
grade of work demands. The balance of the man's rate is 
charged to the department. 

In contrast to the necessity quoted, the opposite one 
sometimes arises, where lack of labor of a sufficiently skilled 
type makes it imperative to use, say, a 30-cent man on a 
grade of work ordinarily requiring a 40-cent man. In such 
cases the job is charged with labor at the rate of 30 cents 
and the man, while working on that job, receives a bonus 
charted from the class in which the 40-cent man would 
stand, thus receiving added remuneration because of the 
higher class work. When the man goes back to his usual 
grade, his bonus returns to its usual class. Neither diver- 
gence from the ideal point of standardization is desired, but 
may prove valuable in keeping intact an organization under 
trying conditions. 

To further illustrate the discrepancy which will be seen 
between costs figured with a differential burden divided to 
obtain true results, let us assume a job taking 10 hours' 
labor and done on different machines with their individual 
process rate burdens. 

Labor $.30 per hour; $.12 per hour Dept. burden 

1st example : ] 
$.10 per hr. }-+$.12 per hr. Dept. burden+$.30 labon=$ .52 per hr. 
mach. burden J 

2nd example : 1 
$.25 per hr. f +$.12 per hr. Dept. burden+$.30 labor=$ .67 per hr. 
mach. burden J 

3rd example : ] 

$1.50 per hr. [-+$.12 per hr. Dept. burden+$.30 labor=$1.92 per hr. 
mach. burden J 

SUMMARY 

1st Example 2nd Example 3rd Example 

10 hours $3.00 $3.00 $3.00 

$.12 Dept. burden 1.20 1.20 1.20 

Machine burden 1.00 2.50 15.00 



Total $5.20 $6.70 $19.20 



FREDERIC A. PARKHURST 51 

A comparison of these figures with the preceding ex- 
amples will show without any argument that an error must 
exist somewhere. Not only does the blanket or percentage 
method give us a cost which is not a true cost, but it seri- 
ously affects quotations and selling prices, so that there 
can be no intelligent control of these. Furthermore, the 
small job is carrying a large amount of burden which be- 
longs to the larger job run in large or powerful machines, 
while the jobs processed in these large machines do not 
begin to carry the burden that properly belongs to them. 
(See Fig. 17.) 

To illustrate how an hourly and pound burden is used 
in figuring costs, let us assume a job requiring a total of 
30 direct hours (molding, core making, trimming, etc.) 
and weighing 80 lbs., another weighing 200 lbs., and another 
that nets 1000 lbs. of good castings all for 30 hours direct 
labor. 

12 3 

80 Lbs. 200 Lbs. 1000 Lbs. 

Labor $9.00 $9.00 $9.00 

Average hour burden $.60... 18.00 18.00 18.00 

Pound burden at $.03 2.40 6.00 30.00 

Total $29.40 $33.00 $57.00 

or cost per lb. 
exclusive of metal $.3675 $ .165 $ .057 

Study of the above example will readily convince the 
reader that such a basis of figuring readily shows up the 
good job from the poor. Prices can be intelligently and 
confidently fixed. Oxidation and shrinkage, fuel, defective 
loss, etc., melting, handling, pouring, shipping - , trucking, 
etc., are "pound" items. All other items come under 
hourly burden expense. A job without cores takes no core 
or "knocking out" burden. Why charge them with any? 
The use of this differential hourly and pound burden for 
foundry work is the key to correct costs for that class of 
work, as it is for other trades. If the class of work in a 
shop changes overnight, as it often does in the jobbing busi- 



82 DISTRIBUTING INDIRECT EXPENSE 

ness, the cost distributed to jobs automatically takes care 
of itself. Under the flat-rate or percentage method this 
condition does not stand. 

So far general overhead as burden has not been specifi- 
cally considered, but it has been assumed as added to the 
departmental burden so as not to confuse the average 
reader. Refer to Fig. 17. This diagram is based on ap- 
proximate figures. The same basis of figuring is main- 
tained throughout. The curves are based on the assump- 
tion that the problem is confined to one department carry- 
ing a definite departmental burden per hour. The burden, 
of course, includes miscellaneous department expense, fore- 
manship, general sales, administrative expense, etc. To the 
department burden has been added a machine hour burden 
figured on equipment ranging in value from $100.00 up to 
$8000.00. Each machine burden includes interest, depre- 
ciation, power, maintenance expense and its proportion of 
the departmental expense that can be prorated to it, based 
on the proportion of heat, light, floor space, etc., allotted 
to each machine plus the wages of the operator. The wage 
used starts at $1.80 per day for productive labor working 
without machine equipment or with equipment up to the 
value of $100.00. This direct labor wage also includes 
an allowance for bonus. Bonus is charged as a direct item 
(including the foreman's bonus, which is paid on a per- 
centage basis depending on what the men earn on each 
job). The direct labor rate, which starts at $1.80 per day, 
including bonus, increases as higher priced equipment is 
brought into use up to $4.40 per day, including bonus, for 
the $8000.00 unit. 

The problem illustrated in Fig. 17 is figured on the as- 
sumption that there is but one machine, or process point, 
for each of the unit valuations shown on the diagram for 
that department. The figures above mentioned are repre- 
sented by the curve marked "true cost line based on differ- 
ential burden method." 

Assuming that the true cost line (Fig. 17) represents 
one day's work for each unit, the sum total of these vari- 



FREDERIC A. PARKHURST 83 

ous amounts will equal the total expenditure for running 
the department for one day of ten hours. This amount di- 
vided into the productive hours represented (work units 
times 10) will give the average rate per productive hour. 
This is the flat-rate-per-hour figure often used and is repre- 
sented on the diagram (Fig. 17) by the straight horizontal 
line. The shaded area to the left of the point where the 
horizontal line crosses the true-cost line represents an ex- 
cessive false cost. In other words, labor performed in a 
department using low-priced men and operating low-priced 
equipment carries two or three times the burden that it 
should. As the valuation of the equipment used by each in- 
dividual increases, the difference between the false cost ob- 
tained by the flat-rate-per-hour method and the differential 
burden method becomes gradually less. At a certain point 
the flat-rate burden line crosses the true-cost line. At the 
point of coincidence we get the same cost for each of the 
two methods illustrated, providing, of course, that the ratio 
of productive hours is the same for each work unit. 

The moment we pass by the point of intersection of the 
flat-rate-per-hour burden line with the differential burden 
line, the shaded area represents the minus and false cost 
obtained by the flat-rate-per-hour method. In other words, 
at this point the flat-rate method does not distribute enough 
burden to work being done on the higher priced machines 
or equipment. Such class of work shows a cost which is too 
low, figured on the flat-rate-per-hour-method, just as the 
other class of work to the left of the diagram shows a 
figure too high. 

Under the differential process rate method, the burden 
per hour changes with the valuations of the equipment, 
increased wage, interest, depreciation, power, maintenance 
charges, etc. The expense of operation is distributed in 
proportion to the operating cost of equipment necessary to 
turn out a given job. The basis of figuring cost should be 
one which will allow one manufacturer making certain parts 
to intelligently compare with another, equipped to do the 
same, his costs or estimates. A method of figuring cost, 



84 DISTRIBUTING INDIRECT EXPENSE 

which will take into consideration all of the elements in- 
volved in turning out a given product, will mean something 
as a cost comparison. 

Another direct effect of incomplete cost methods or incor- 
rect methods of distributing burden results in a great many 
firms being unable to determine whether they should man- 
ufacture their own product or whether they should purchase 
it outside. There is no gainsaying the fact that a firm 
equipped for and experienced in the manufacture of certain 
products should be able to turn out that product at a cost 
cheaper than one could do who is not familiar with special- 
ization in that given line. Compare the cost of the specialist 
making certain kinds of product, figured on the flat-rate-per- 
hour burden, with costs consuming the same amount of time 
as shown by the shop making the same product, but not 
equipped or specializing in that line, and still using a flat- 
rate-per-hour method. It will be found there is a great dif- 
ference in cost. The reason for this difference is that the 
manufacturer specializing in a certain class of work is 
equipped for it and his department does not carry the wide 
range of equipment that the other plant which does not 
specialize has to carry. Though their methods of figuring 
the flat-rate burden may be the same, still the specialist 
equipped for that class of work will not have the wide vari- 
ation between his costs and the true costs that would be 
found in the other department. Though his flat-rate-per- 
hour burden method is incorrect, still for his class of work 
it will average closer than will the same method used by the 
manufacturer who turns out a large range of product rather 
than a special or limited line. 

4-E. Differential Process Rate Method 

The wide difference in cost, obtained even by the same 
method in different plants, will well emphasize the impor- 
tance of having a differential process rate determined along 
the lines to be expounded. It is as absolutely necessary in 
the determination of true costs to have a true distribution 
of burden as it is to know how much direct labor and 



FREDERIC A. PARKHURST 85 

direct material was employed or used in connection with 
any specific operation or job. No argument can be sus- 
tained that supports a method averaging- a wide range of 
equipment which ignores the relative wear and tear and the 
relative power and consumption of investment, or which 
does not recognize the various classes of labor employed 
to use that equipment. 

To obtain an accurate distribution, first, determine the 
several burdens which the problem presents and keep them 
separate as far as the monthly expression of their valuation, 
and the analysis of the amounts from which they are deter- 
mined are concerned. An analysis of the statement for the 
period is desirable. Compare the different burden amounts 
both by amount and by burden rate, as the expenses going 
to make up these amounts can be more readily separated 
and understood in this way. 

Second, after the differential burden rates have been 
determined and are ready for use, either in connection with 
estimates or the recapitulation of costs, the several hourly 
rates may be added together, to make one fixed sum for 
each piece of equipment or work point. Of course, if the 
several burdens include a piece or pound burden, this fig- 
ure will have to be used as still another item and added 
to the cost or estimate as a separate amount. The point 
is that several burden rates for one unit or work point may 
be combined so as to have less factors to use in connection 
with figuring. The latter method is preferable and the 
detail below is based on such a combination. 

In this connection it is sometimes possible and desirable 
to include the operator's rate in the total figure used, but 
it is not recommended. It requires a great deal of detail 
and supervision on account of the fluctuations in rates as 
applied on different work, particularly when the shop is 
not working to its normal capacity. Charge all bonus as 
a direct item against each job, as it is a variable factor. 
Combine the hourly rates and list them by work units de- 
partmentally. Include in this total rate all the various items 
above considered. 



86 



DIFFERENTIAL PROCESS RATE METHOD 



Total true cost is compounded of the hourly differential 
process rate plus pound, piece or other burden not possible 
to include in the process rate, plus direct labor, to which 
bonus has been added, plus direct material. 

The following items are to be figured for each individual 
machine, bench or other piece of apparatus that constitutes 
a work point. In cases of a duplex machine that is operated 
by more than one man each item must be figured separately 
for each work point. For example, a double buffing wheel 
stand has two work points. Symbolize each end and figure 
each as a separate machine, splitting cost installed, etc., to 
the correct proportion for each work point, all in accord- 
ance with the following" schedule of factors. 



Schedule of Differential Process Rate Factors. 
(9-hour day.) 

ITEM NUMBER 

1. Symbol of machine or work point. 

2. Maker's name. 

3. Style. 

4. Size or number. 

5. Floor space allotted to same. 

6. Horse-power actually consumed. 

7. Value installed complete. 



Description of equipment 
used at each work point ' 
by each individual em- 
ployed as direct labor 



B 

Items forming- 
charges at each work 
point described above 
in A. 



f 8. Interest, insurance and taxes, 
yearly | 9. Depreciation. 

10. Indirect machine cost (X4 and X6). 

11. Heat, light and rent. 

12. Power and transmission expense. 

13. Total "B" yearly charges (8 to 12 in- 
clusive). 

f 14. Machine rate per direct hour (Item 13 

divided by 2000). 
| 15. Department base rate per direct hour 

(XI to X32 exclusive X4 and X6). 
| 16. Local plant base rate per direct hour and 

for departments not provided for in 

IS. (AX1 to AX56). 
I 17. General administration, financial, sales 

and operating expense ( GAX to GXX 
inclusive) per direct hour. 
[ 18. Minimum profit factor per direct hour. 

f 19. Process rate to use per direct hour for 
-j each specific work point, viz. sum of 

Differential process rate. I J4 ; J5^ i5 ; \y an( j ig. 



C 

Hourly rates. 



D 



FREDERIC A. PARKHURST 



87 



Basis on which Differential Process Rates are Figured 
as per Schedule Above. 

(Computed on a 9-hour day.) 

DESCRIPTION ITEMS 
(1-7 inclusive) 



Item No. 
1. Symbol. 



2. Maker. 

3. Style. 



4. Size. 



5. Floor space. 



6. Horse-power. 



7. Value installed. 



This symbol indicates the particular machine, 
bench or other apparatus constituting a work 
point and is for identification purposes. 

Maker's name. 

Whether hand, power, turret, universal, etc., de- 
pending on kind of equipment. Detail sufficiently 
to assist in determining general style of the 
machine, bench or apparatus. 

Give sufficient data to indicate main capacity 
measurements of the apparatus and maker's num- 
ber or symbol if one is obtainable. 

This is to be expressed in square feet. Make an 
allowance for working space around machine or 
bench adequately to handle its material. This 
forms the basis for prorating heat, light and rent, 
Item 11. 

This item is to be based on the actual horse-power 
used for each machine compared to the total 
horse-power on any one transmission line. 
(See 7-f.) 

This figure should be the total cost in running 
order set up and includes cost of : 

a. Machine and appurtenances. 

b. Freight. 

c. Cartage and placing on site. 

d. Millwright work and material, cost of 
foundations, assembling, etc. 

e. Belts, etc. 

/. Proportion of cost of motor drive and wiring; 
or of transmission shafting, wiring, motor 
and belt which drives same. Base on H.P. 
consumed as compared to total on any one 
line. (See 6 and 12 and list herewith.) 



88 



DIFFERENTIAL PROCESS RATE METHOD 



TABLE II 
Example for 7f 



LINE SHAFT NUMBER 



5 and 6 



Horse-power 13.5 18.5 35 24 35 

Motor cost $180.00 $275.00 $320.00 $275.00 $320.00 

Wiring cost ... . 98.50 197.00 345.00 197.00 345.00 

Belt cost 17.60 26.40 35.20 26.40 35.20 

Transmission cost 217.00 280.00 280.00 280.00 224.00 

Total cost ..$513.10 $778.40 $980.20 $778.40 $924.20 

Per H.P $38.00 $42.09 $28.00 $32.43 $26.40 



YEARLY CHARGES 

(8-12 inclusive) 

Based on the above we must now determine the cost per year ex- 
pressed in dollars for the following factors. The total of 8 to 12 
inclusive (13) will then be divided by 2000 hours to determine the 
hourly rate for 14. (See 14 and 15 below.) 



Item No. 
8. Interest, etc. 



Based on sum of : 

a. Interest 

b. Insurance 

c. Taxes 



use prevailing rates. 



9. Depreciation 20% This figure is used on the assumption that the 
(To be varied to equipment running at maximum capacity for 5 
suit conditions) years becomes more or less obsolete, or has such 
a reduced value as compared with the latest im- 
proved machines that it will have to be replaced, 
or almost entirely rebuilt. 

10. Indirect machine This item includes any repairs or maintenance 

cost. cost, and material or sundries incidental to the 

daily operation, etc. Expenses X4 and X6 for 
each machine or bench by symbol. 

11. Heat, light and This item is prorated to each machine or bench 

rent. based on "5" after deducting the amount charged 

to the department rate as explained for "15." 



FREDERIC A. PARKHURST 



89 



EXAMPLE 



Light 
Equipment 



Heating Land and 

Plant Building 

$4352.00 $27,500.00 Totals 

$261.12 $1650.00 $1965.13 

435.20 1375.00 1900.20 

252.00 

2000.00 2000.00 

17.40 105.00 126.00 

13.06 82.50 98.26 

$6341.58 



Cost Installed $900.00 

Interest $ 54.00 

Depreciation 90.00 

Electricity 252.00 

Fuel and labor 

Insurance 3.60 

Taxes 2.70 

Total rent per year 



In the example shown the total rent chargeable to the 
department, based on that department's valuation in light- 
ing and heating equipment and in its land and building, 
amounts to $6341.58 per year. If we assume a total floor 
space of 20,000 square feet we have $.3178 per year rental 
per square foot. The number of square feet allotted to each 
work point (Item 5) multiplied by $.3178 gives the yearly 
charge for that work point (Item 11). The total cross 
added amount (Item 11) subtracted from $6341.58 leaves a 
balance of undistributed rent which forms one of the depart- 
mental charges included in Item 15. 



Item No. 
12. Power and 
transmission Ex. 



13. Total yearly 
charges. 



14. Rate per hour 
for 13. 



This should be based on the horse-power hours 
for each motor drive for 2000 hours per year ; or 
total horse-power hours X cost for elctricity per 
horse-power hour. Add maintenance of shaft, 
belt, etc., not provided for above in "10." Pro- 
rate as per "6." The sam principle applies to 
any kind of power. 

This is the sum of 8 to 12 inclusive expressed in 
dollars, and covers one year's cost for each work 
point sparately. 

HOURLY RATES 
(14-18 inclusive) 

The yearly total for each work point (see 13) is 
to be divided by 2000 to determine the cost per 
hour. The normal year of 2000 direct hours is 
determined as follows : 



90 



DIFFERENTIAL PROCESS RATE METHOD 



a. 300 working days per year. 

b. 300x9 hours per day=2700 direct hours per 
year. 

c. Consider 75% capacity as a fair average 
normal working year or 2025 hours : say 
2000 hours per year for each work point. 



Item No-. 



15. Dept. base rate. 



This rate is determined by taking all of the ex- 
penses of a department that are not included in 
8 to 12 inclusive and dividing same by the product 
of direct man daysX2000, or : 



Dept. Yearly Expense (8 to 12 inclusive) 
Total dept. direct man hours per year 



=Dept. Bate. 



16. Local plant base 
rate per di- 
rect hour. 



The Departmental yearly expense includes all 
XI to X32 (less X4 and X6) items in operating 
statement. From the figures so determined for a 
year we must subtract the amount of money rep- 
resented above in Items 8 to 12 inclusive, and 
which have already been prorated into the ma- 
chine rate, else we have it in twice. This can be 
readily done by subtracting the sum of Item 13, 
cross added for all symbols, from the total in- 
direct cost of running the department for one 
year. The department base rate is the same per 
hour for each work point in that department. 

This amount is determined as follows. From the 
operating statement there must be determined 
the yearly charges against the plant as a whole 
which have not been distributed into the depart- 
mental base rate, Item 15. This Item 16 is to in- 
clude all AXI to AX56 expense plus department 
expenses XI to X32 for the departments, such as 
office, shipping, receiving, timekeeping, planning, 
etc., etc., which are not included in department 
rates, Item 15. 

All yearly land and building charges and other 
items are to be included for that part of the plant 
not distributed into the machine and departmental 



FREDERIC A. PARKHURST 91 

rates, Items 14 and 15. This includes undis- 
tributed : 

a. Interest. 

b. Taxes. 

c. Insurance. 

d. Depreciation. 

e. Also unapportioned AX and departmental 
items above mentioned. 

The sum for one year determined as above 
explained is to be brought down to a rate per 
direct hour by the same formula as given for 
Item 13, viz. : 

Undistributed Local Plant Yearly Charges 

Total direct hours for entire plant =Local Plant Rate. 

The local plant base rate so determined is the 
same for every work point. 
Item No. 

17. General base This item is the sum of the general expenses of 

rate. the business not included above. If there is more 

than one plant, these charges are prorated 
monthly to each plant. These expenses are cov- 
ered by the GAX to GXX, Items 1 to 56 inclu- 
sive, and do not include any charges provided for 
in any of the foregoing items, 13 to 14 inclusive. 
The sum of these general expenses for one year 
prorated to each plant should be divided by the 
normal total direct hours worked by that plant 
as explained above for Item 16. This rate per 
hour is the same for all work points. 

18. Minimum profit Use for this a rate per hour (for example, 15c to 

factor per di- 25c), which will net a minimum profit per year 
rect hour. on the invested amount of at least 6%. The pro- 

duct of the total normal work points for any 
plant multiplied by 2000 hours (for a 9-hour 
day), divided into 6% of the total investment 
for that plant will give the correct amount per 
hour to use as a minimum profit factor. This is a 
safety factor to- be considered part of cost of 
production. 

DIFFERENTIAL PROCESS RATE 

(19) 

19. Differential pro- This amount for each work point is the sum of 

cess rate to Items 14, 15, 16, 17 and 18. A list of each work 
be added to point identified by symbol should be made with 
every hour of the process rate shown opposite each work point, 
direct labor. Reference to this list gives instantly the correct 

rate to use for any operation when figuring either 

estimates or costs. 



92 UNDISTRIBUTED BURDEN 

4-F. Undistributed Burden 

A number of different ways of disposing of undistributed 
or unearned burden has been suggested and in fact used to 
some extent. Too often the matter is overlooked entirely. 
Modern business now demands that this very important 
point be definitely settled and disposition made of it. The 
fact must not be overlooked that past practice is not ap- 
plicable in these times. Why? Because business condi- 
tions no longer permit of long prices, cheap materials and 
labor, orders coming in unsolicited, ignorance of costs and 
"guessed at" selling prices. 

Elsewhere emphasis has been laid on the importance of 
limiting the chargeable burden when it is too high due to 
low production. The reason as explained above is so as 
not to get excessive costs or high (and false) inventory 
valuations. On the other hand, it seems fair to get advan- 
tage of a burden slightly below the high limit established 
whenever the volume of business makes this possible. The 
establishment of this high or "limit" mark should be based 
on fair averages and the consensus of opinion of the prin- 
cipals. 

By the establishment of a maximum burden limit (either 
hour, pound or other unit of distribution) we are able to 
use that limit figure to estimate costs when establishing 
selling prices. Such estimates must always be based on this 
maximum allowable burden limit — no more or no less. 

In the author's estimation, the unearned burden should 
be debited to the Loss and Gain account. Each monthly 
operating statement should show the amount of this charge 
in a separate item. This same amount should also be ex- 
pressed in memo as an item properly chargeable against 
sales expense for that period. This can appear as an extra 
item of sales bad work expense, X32. 



LECTURE XVIII 



ESTIMATING 

6-A. Machine Shop. 
6-B. Foundry. 



The following discussion of the ibove subjects has been reprinted 
from Chapter VI of the author's "Predetermination of Prices." Fig- 
ures referred to have been omitted and the student is referred to the 
above mentioned book for further detail. 

The foregoing chapters have shown the method of 
analyzing and obtaining detailed figures for the compilation 
of true costs. Without a cost analysis and detailed informa- 
tion, it is impossible to make an accurate estimate. An 
estimate should contain no minutest per cent of "guess 
work." It should be based on a complete detail knowledge 
of everything pertaining to the operation of the plant which 
is going to manufacture the product on which the estimate 
is to be made. The more highly organized the plant and the 
more complete the plant's records are, the more correct will 
be the estimate. 

It is necessary to predetermine costs preparatory to 
reaching the true selling prices. The predetermination of 
a cost, of course, depends on the records above referred to, 
though past records represent the basis on which predeter- 
mination of cost depends. In plants where the science of 
management has established elemental operation and pro- 
duction standards and where the efficiency ratio is a figure 
which is always known, the predetermination of costs can 
be worked down to such a point that the actual cost and 
the estimated costs will agree within a very few per cent. 
On the face of it, the statement that cost can be predeter- 
mined sounds a little "fishy" to the layman. Practice 
has proved that the predetermination of cost is not only 
possible, but an established fact and a most essential one 
for the producer and purchaser alike. 

A complete discussion of the subject of estimating would 
take up too much space, as the details vary much in different 

93 



94 MACHINE SHOP 

kinds of work and in different lines of business; but it may 
be well to mention several of the important points to be 
considered when making estimates on the average jobbing 
or machining jobs in any of the allied metal trades, including 
foundry work. 

6-A. Machine Shop 

The following is an abstract from one of the author's in- 
structions on estimating- issued to a plant manufacturing 
machine tools and dies and doing some jobbing and develop- 
ing work. 

An estimate should be written (using form FAP36a) for 
every proposal quoting a price for product not standard. 
The form above referred to must be filled out complete as 
per the printed matter thereon. (See Fig. 23.) 

Estimates shall be made only by those authorized by the 
Company (chiefly the Engineers) and by those to whom 
estimate books have been issued. These books contain a 
white original form and one yellow duplicate with some- 
times a blue triplicate. The white original, when com- 
plete, must be forwarded to the Sales Manager, who will 
see that it is filed with the prospect's correspondence and 
attached to the file copy of the proposal. The carbon or 
yellow copy remains in the book for the reference of the 
estimator. 

The following rules should be observed in making all 
estimates : 

a. Divide the job into as many groups as possible. 
Treat each group or item separately and completely. 
Make this grouping conform to that which will be 
used in making out the order. The estimates can 
then be closely checked while work is in process and 
after it is completed. The estimate should be used 
as a guide by the Order Clerk when itemizing the 
general order. 
b. Include every item of the expense incident to pro- 
ducing the article or articles being estimated on, 
including special sales expense (if any), designing, 
drawing, engineering supervision, patterns, all ma- 



FREDERIC A. PARKHURST 95 

terial in detail by classes and weight, labor by indi- 
vidual operations and prices as much as possible, 
including assembling, fitting up, testing, photograph- 
ing, crating, boxing, loading, etc. 

c. A list will be provided giving the differential process 
rates, or if this is not available, the item of expense 
must' be provided for by the estimator and the 
"amount" left to be filled in by the Production Man- 
ager. Treat other questionable items in the same 
way. Leave nothing out ; the costs will be provided 
in all cases where they are not available to the estima- 
tor. 

d. The estimator knows from the original inquiry com- 
bined with the specifications of the Engineering de- 
partment what is to be estimated on. The Engineers 
often are the only ones who have all the details. All 
material, labor, etc., must be included or else the sales 
department cannot intelligently quote. Failure to do 
this, or a resort to pure "guess work," means a loss 
to the Company. 

e. All estimates should total as costs to the manufacturer, 
and not selling prices. Fixing the selling price is not 
up to the estimator. 

/. An intelligent analysis (including the itemizing) of 
an inquiry is absolutely necessary before proceeding 
with the detailed estimate along the lines outlined 
above. The fact must not be lost sight of that if 
the estimate is not accurately made, the cost is likely 
to overrun, resulting in a loss. All weights must be 
very accurately calculated based on the rough sizes 
of the material before finishing. 
When issuing the general order for any job on which 
an estimate has been prepared, it is the Chief Order Clerk's 
duty to see that the estimate number appears in the word- 
ing of the order for each item on which there was an esti- 
mate. This reference is for the attention of the Engineers 
and Draftsmen so that the designing may be carried through 
in accordance with the estimate, and for the planning de- 



96 MACHINE SHOP 

partment so that they may intelligently route and bring the 
job through within the cost limits estimated. 

The sales department should never quote a price until 
an accurate and careful detailed estimate as above described 
has been made. On new die work a definite price should 
never be quoted, but use the estimates as a guide to deter- 
mine about how much the dies should cost. The experi- 
mental cost on this class of work is always an unknown 
quantity. 

Let us refer, at this point, to Chapter II, 2-A to 2-1 
inclusive, wherein a number of functional developments 
of management are explained as having an important bear- 
ing on true costs. The preliminaries, or shop control of 
work in process, and all indirect expense items, have a very 
direct influence on the accuracy of an estimate. One real- 
izes the particular truth of such a statement when appre- 
ciating that in the last analysis an estimate is practically 
the predetermination of costs. 

The Planning Room is directly responsible for the con- 
trol of materials and labor and all other resources, so as to 
not only maintain standards, but to preclude any possibility 
of costs overrunning estimates through lack of knowledge 
of just what was included at the time the estimate was 
made. Verbal orders from customers must be approved in 
writing. See forms shown in Figs. 24 and 25. 

In developing a correct estimate on any new work there 
are many items to be considered and in practically every 
business there are some items which are subject to such 
variations that it is very difficult to predetermine their 
cost. Specific experimental features always add a distinctly 
unstaple factor especially where new designs of drawn or 
stamped work are involved. In such cases, estimates rep- 
resent an approximate rather than a definite figure on which 
to base a fixed selling price, and such estimates should be 
considered as only an approximate indication of what the 
work will cost the customer. Prices should be based on 
cost plus a profit figured in any of several ways, which will 
be discussed in detail under Chapter VII. 



FREDERIC A. PARKHURST 97 

Regardless of the kind of business and the class of work 
to be estimated on, it is imperative that the estimator be 
supplied with complete data based on analytical costs of 
both direct labor, direct material and the various indirect 
expenses. These expenses should be expressed in terms of 
differential process rates and burden rates with all their 
variations. Classes of work permitting" of a definite estimate 
should always be figured on a full consideration of all the 
figures available. These should be applied in accordance 
with the methods outlined above. 

When the time study methods are sufficiently advanced 
so that a check can be kept on the plant efficiency, direct 
labor cost should be figured on the maximum efficiency 
basis. After the figures have been compiled, those which 
vary according to the relative efficiency of the man per- 
forming the direct labor should be increased by using - the 
plant efficiency factor as it stands from period to period. 
Assuming the plant efficiency to be running 70% of the 
time study standard, or maximum, the estimates for this 
part of the work would be increased by 1.43. If the men 
are running around 80% of the maximum efficiency, such 
an estimate would be represented by the factor 1.25. This 
factor alters with the conditions. In cases where the effi- 
ciency factor is not used, the estimate must be figured on a 
basis of existing records. 

6-B. Foundry 

The following is an abstract from a standard instruc- 
tion covering the method of estimating on foundry work, 
including machine operations in cases where the price cov- 
ers a piece machined complete. 

The estimate form FAP134 is made up in book form 
(see Fig. 26), so that a white original copy may be used 
in connection with the carbon paper and detached from 
the book when the estimate is complete. The white orig- 
inal is filed in Sales department. The yellow copy remains 
in the book as the estimator's record of each estimate. A 
detachable carbon "rider" is also provided to give an extra 



98 FOUNDRY 

record of the general specification of the estimate, equip- 
ment, method, average weight, etc. The rider is sent to the 
Planning Room as their guide in handling the order. ( See 
Fig. 27.) 

All of the information asked for in the printed heading 
forming the top part of the sheet should be filled in com- 
plete. The heading indicates the basis on which the esti- 
mate was made and the method under which the plant 
expects to run the order in the event the business is secured. 
In making estimates, do not assume a lot of conditions but 
be sure all of the points referred to on the form are ac- 
counted for. If one does not have full information of what 
is required for a job, it will be a hopeless task to intelli- 
gently estimate what it will cost. Neither can one hope to 
intelligently fix a selling price which will be profitable and 
yet not excessive. 

In cases involving more than one different price, a sepa- 
rate detailed estimate is to be made of the cost of castings 
from each pattern or each different size or design, whether 
rough or finished, or both. 

Estimates must be made only by a duly authorized 
person and approved by the local manager, production man- 
ager and superintendent. All estimates shall be made in 
accordance with this instruction and on estimate form 
FAP134. The original copy of all estimates shall be filed 
in the estimate file. All orders received subsequent to or 
based on an estimate must show the estimate number on 
the general order form. 

When cost sheets are closed up, the summary cost card, 
Form FAP145, sna U a ^ so show the estimate number. 

In making estimates, be sure that full information is had 
regarding the pattern equipment from which such castings 
are to be made. Whenever possible, it is desirable that 
full pattern equipment be made in the pattern shop con- 
nected with the foundry which is to supply the castings. 
There will be cases, of course, where the customer desires 
to furnish his own equipment. In such case the foundry 
officials can often consult with him in reference to furnish- 



FREDERIC A. PARKHURST 99 

ing the proper kind of patterns, rigged up to suit the best 
foundry practice. 

Whether the patterns are made new, and furnished by 
the customer or made new by the foundry the most careful 
observation must be given to the kind and style of each 
pattern and the method of rigging- up. All patterns for 
small work should be plated wherever possible. Pattern 
equipment and estimates should include core dryers, and 
any special rigging or jigs that may be necessary in con- 
nection with making or setting cores. It shall be the policy 
as far as possible to include such rigging in the cost of 
the pattern equipment, all of which should be paid for by 
the customer. Include in this charge to the customer every- 
thing not part of the regular standard equipment and in- 
clude labor of getting it rigged up, also cost of jigs, gauges, 
etc., used in setting or sizing cores. 

In case of patterns and equipment already in existence, 
and for which new patterns cannot be obtained, the foundry 
should keep in close touch with the customer to see that 
such patterns are kept up in first-class condition. Many 
gated patterns require matches, which after some use be- 
come more or less broken down around the edges. If the 
matches are not kept in good repair, the foundry cannot 
realize maximum production on such jobs. It should be 
the foundry policy to refuse to run patterns which are 
not in proper condition or which are so arranged that the 
foundry will be put to additional expense in turning out 
castings. In such cases, the foundry must get the co-opera- 
tion of the customer toward putting the patterns in first- 
class shape, with his authority, of course, and with the 
understanding' that such altering or repairing of patterns 
is to be charged up to him. 

There is no economy in running pattern equipment after 
it begins to get out of repair, or pattern equipment which 
is not adequate, or properly arranged, for the class of work 
in question. It must be the policy to give patterns careful 
inspection, and if necessary make sample molds enough to 
be sure that the pattern and other accessories are in first- 



IOO FOUNDRY 

class shape and ready for regular production. This work 
must be done by the Equipment Foreman, who is a specially 
trained man. When the equipment is satisfactory, it may 
then be passed to the job rack, preparatory to being for- 
warded to the proper floor bench or machine and accom- 
panied by the proper flask (or flasks), bottom boards, etc., 
for regular production. If a heavy floor job, it should be 
tried out on the floor where it is to be run. 

A foundry cannot immediately develop its pattern equip- 
ment fully along the lines above described, but such should 
be the policy. By continually working in this direction a 
great improvement can be effected, not only in the cost of 
producing castings but in the quality and deliveries. The 
above facts should be borne in mind whenever making esti- 
mates, and I repeat for emphasis the fact that the foundry 
should not "allow" in "castings estimates," anything for 
pattern expense or equipment which should be charged up 
to the customer. On the other hand, do not hesitate to add 
into your estimate anything which is necessary for the 
proper production of the job. 

Pound Prices 

Pound prices are to be figured on a basis of the net mini- 
mum weight of each casting. 

Piece Prices 

Piece prices are to be figured on a basis of the average 
weight of each casting, plus 5% to 10% as an allowable 
foundry weight variation under commercial production 
conditions. This percentage varies with the class of work. 

The Planning Room, or Office (as the case may be) daily 
checks piece weights of all castings shipped the day before. 
The check consists of a comparison between the average 
weight list on file in the Planning Room or Office, and the 
charge slips turned in by the Shipping Clerk for the previ- 
ous clay's shipments. This method is in vogue at the pres- 
ent time, and is a first check in locating errors in shipping 
weights and billing. The method also catches any errors 



FREDERIC A. PARKHURST IOI 

which might affect the average weight list, due to an altera- 
tion in the pattern unknown to the Planning Room or 
Office. Although it is unlikely that changes will be made 
in the shops without orders, commercial productions may 
increase the weight of the castings by several per cent, due 
to strains, inequality in cores, etc. It is, of course, neces- 
sary for production records that such changes be known. 
When selling by the piece price, the method provides a 
check to keep the weight within the estimated limits. Al- 
though there is an allowance of 5% or 10% variation in 
weight in estimates for castings sold by the piece, still it is 
to every one's advantage to hold the weight as near normal 
as possible. On some classes of work an excessive weight 
variation might mean much more in failing to machine 
properly than in wasting of metal. 

The following method is to be employed in making- esti- 
mates for castings from each different pattern : 

a. Consult existing cost data to determine direct labor 
similar cost on the particular job in question, or for a 
similar job, if such a record exists. (See price card 
Fig. 28.) 

b. Study the^average direct labor cost record of work 
of the same general class, if such record exists. 

When consulting records referred to in items "a" and 
"b" above, consider only the direct labor cost, and not 
the total cost including burden. The item of burden 
is likely to vary. The prevailing rate of burden at 
the time the estimate is made should be used. For 
data on "Burden" see Instruction 108. 

c. Consult with the Superintendent, Time Study Fore- 
man, Pattern Shop Foreman, and Cost Clerk, for 
data and estimates on direct labor costs. 

For details of each estimate see Form FAP134, Fig. 26. 

The estimated total labor cost, determined as per items 
"a" , "b" and "c" above should be based on the average 
prevailing rate, plus the bonus, paid the class of help to be 
employed on that particular work. These figures are to be 



102 FOUNDRY 

based on specific equipment to be run by a definite prede- 
termined method, and in the size flasks best adapted to the 
job. For standard production data, flask sizes, etc., con- 
sult the time study foreman. Work as much as possible 
from data on standard time sheets, Form FAPI150. 

Burden 

Differential burden rates and differential process rates 
will hereafter be referred to as "burden." (See Instruction 
108.) This burden is to be added to the estimate on the 
basis of so much money per man hour (and not as a per- 
centage factor), plus a pound burden. 

It may be well to explain here the reason for distributing 
the burden on a man day (or hour) basis rather than by 
percentage or tonnage basis. Experience has shown it is 
more accurate to distribute on the basis of time, rather than 
on the percentage of wage paid. In other words, time is the 
chief controlling factor in business. Men are hired on a 
time basis at so much per hour, and the extra bonus they 
earn also applies to a definite length of time. Indirect ex- 
pense, salaries, etc., cover a definite time. Heat and light 
and power are maintained for a definite time each day. 
Finally a day's work is concluded by having expended so 
many direct hours to turn out a certain volume of work, 
per each man employed, as direct labor on all production. 
For each man so employed as direct labor on all productive 
work, so much money has been paid out for a man day, a 
unit of time. In addition that man day has cost us one 
man day's proportion of a burden. Why do many foundry- 
men ignore this time element? 

In addition to the hourly burden there is a pound burden, 
which covers the distribution of expense for departments 
iD, 2F, iF, iG, iS and 10X. The total burden is pro- 
rated for these six departments on a pound basis in addi- 
tion to the departmental hourly burden. This distribution 
is obtained by taking the burden for the current month and 
applying it to the number of pounds of good castings enter- 
ing into the estimate in question. Pound burden is dis- 
tributed to castings in addition to the departmental or 



FREDERIC A. PARKHURST IO3 

process rate burden. Other burdens exist for pattern work 
iP and for brass finishing work 2U. This is prorated on 
the hourly burden basis, also under the differential process 
rate. 

To properly summarize the preceding - , it should be noted 
that we have several rates of burden distribution, which in 
the aggregate are called our differential burdens. The list 
follows : Any estimate or cost summary must include one 
or the other, and perhaps several of the following groups 
of burden. These are to be used departmentally for each 
of the following groups. (See Instruction 108.) 

Castings j Hourly burden and pound burden. 

Pattern and flask / 

work ( 1 P, 1 K < Hourly burden. 

and iU). ( 

Machining i Differential process rate. 

Plant Efficiency Factor 

In considering items "a" , "b" and "c" a conservative 
estimate of day work may be used without any addition due 
to the plant efficiency, as such a conservative estimate would 
in itself cover such allowances. Eventually, however, when 
all direct labor is under control, and standard production 
figures govern nearly every case the plant efficiency factor 
comes into use. It is to these standard maximum produc- 
tion figures, as per the bonus schedules and standard ele- 
mental time sheets, that the following factors apply. (See 
Form FAP150, Fig. 29.) 

Local plant conditions at the time of the installation of 
scientific methods are often such as to make it necessary to 
start bonus as low as 60% of the maximum calculated pro- 
duction. Later on, as the men begin to earn bonus, and 
come nearer the maximum, this factor is changed to 70%. 
Later this factor is raised to 80%. 

Plant efficiency factors are as follows : 

For 60% plant efficiency multiply cost by 1.66. 

For 70% plant efficiency multiply cost by 1.42. 

For 80% plant efficiency multiply cost by 1.25. 



104 FOUNDRY 

Referring to the plant efficiency factors shown on page 
98 it is obvious that when estimating a job in a 70% effi- 
ciency plant the factor 1.43 should be used for work on 
which the bonus starts at 70%. For work on which the 
bonus starts at 60%, the factor 1.66 should be used. On the 
other hand, when all the bonus work starts at 80%, the esti- 
mate should be raised by the factor 1.25. This factor is, of 
course, only used in estimates where the basis of estimating 
is equivalent to 100% bonus production. 

In cases where the estimate is based on conservative day 
work estimates or actual cost figures, the factor does not 
apply and the actual figures are used. If the estimate is 
based on standard time sheets form FAP150, the time to 
be used will be found in the maximum bonus time column. 

The detail of filling in an estimate form is as follows: 
Form FAP134 is made up in book form, so that the white 
original will be used in connection with the carbon paper 
and detached from the book when the estimate is complete. 
The yellow copy remains in the book as the estimator's 
record of each estimate. A detachable carbon "rider" is 
also provided to give an extra record of the general speci- 
fication of the estimate, equipment method, average weight, 
etc. The rider is sent to the Planning Room as their guide 
in handling' the order. 

All of the information asked for in the printed heading 
at the top of the sheet should always be filled in complete. 
The heading indicates the basis on which the estimate was 
made and the method under which the plant expects to run 
the order in the event the order is booked. Overtime is an 
important consideration, and should be controlled through 
the medium of the overtime order. (See Fig. 30.) In 
making estimates, do not assume a lot of conditions and be 
sure all of the points referred to on the form are accounted 
for. In other words, if full information of what is required 
for a job is not at hand it will be a hopeless task to intelli- 
gently estimate what the job will cost. Neither can one 
hope to intelligently fix a selling price which should be 



FREDERIC A. PARKHURST I05 

profitable and yet which though profitable will not be ex- 
cessively so. 

It will be noted that the estimate form is divided into 
six sections numbered from i to 6 inclusive. The follow- 
ing references (sections i, 2, 3, etc.) refer to the sections 
indicated on the form. 

Section i (Special Items). This section covers any 
special items of costs, if there are any, which may enter into 
the estimate in question. The item should be expressed in 
hours, the rate per hour shown and the amount of money ex- 
tended to the "Amount" column. The burden for this item 
should represent the hourly burden based on the prevailing 
rates. The burden rates should go into the "Rate" column 
and the amount of the burden (the hours on the line above 
multiplied by the burden rate) go into the "Amount" 
column. If there is any material applying to this section of 
the estimate, it should be shown in the "Amount" column. 
The "Amount" and "Hour" column should then be totalled; 
this total represents "Section 1 total." 

Section 2 (Pattern and Flask Estimate). This section 
is intended to include all items entering into the estimate 
as far as pattern and flask expense is concerned. On the 
first line should appear the total hours, rate and amount ex- 
pended on this item, including departments iP, iK and iU. 
In the second line the pattern burden should represent the 
iP burden multiplied by the total hours on the line above, 
and the amount carried into the "Amount" column. The 
third line shows any direct materials or sundries that may 
enter into the costs of this part of the work. The total of 
these items for Section 2 gives us "Section 2 total." 

Section 3 (Castings Estimate). Under this section we 
have various items, such as core making, molding, knock- 
ing out, trimming, and any other direct labor as well as a 
bonus item for each of the foregoing. Opposite each of 
the items above mentioned should appear the total hours, 
rate and amount covering all direct labor that can apply to 
any of those groups and affecting the possible costs of the 
job being estimated upon. The above items should be 



106 FOUNDRY 

added, so as to get a sub-total representing the total direct 
hours and direct amount. 

The sub-total should then be increased to a new amount 
by multiplying it by the plant efficiency factor, either 1.25, 
1.43 or 1.66 referred to above. To this new amount should 
be added the hourly burden based on the new total of hours 
determined by the use of the plant efficiency factor just 
referred to. On the next line should be added an additional 
burden representing the pound burden. The next and last 
item making up the castings estimate is the freight from the 
foundry to the F.O.B. of the customer, providing freight 
is paid by the foundry. The footing of these four last- 
mentioned items (bearing in mind, of course, that sub- 
total of Section 3 is ignored because it has been replaced by 
a larger amount on the next line) represents the "Section 3 
total." 

Section 4 (Metal Estimate). This section includes on 
the first line the prices (F.O.B. our plant) of the number 
of pounds of metal required for the quantity on which the 
estimate is based. In the "rate" column should appear the 
rate per pound used in determining the amount in question. 
On the next line should be shown the number of pounds of 
chips that can be recovered as salvage priced at a conserva- 
tive rate per pound, and the amount deducted from the 
metal cost on the first line. The balance gives us our "Sec- 
tion 4 total." 

Section 5 (Tools for Machining Estimate). This sec- 
tion is totalled up to show the hours, wages, and material 
estimate for the tools for each of the twenty operations. A 
summary total is arranged to carry the total tool labor in 
hours and amount into the right-hand columns. On the 
next line appears the total tool material in one amount. The 
third line takes the tool burden, which burden shall be the 
total process rate for work points applying on tools for the 
job in question. These three items foot to an amount which 
gives us the "Section 5 total." 

Section 6 (Machining Estimate). This section is 
totalled to give the estimate of hours, wages (including 



FREDERIC A. PARKHURST IC"7 

bonus) and material for each of twenty machining opera- 
tions. The material column is to include only miscellaneous 
material, such as screws and other parts purchased in con- 
nection with the part being machined; and is not to include 
the material in the casting itself. This item was taken care 
of in "Section 4." The total machining labor for "Section 
6" should appear in hours and amount in the right-hand 
column followed by the total material. The next item 
of burden represents the process rates for the number of 
hours estimated as applying to each work point used in ma- 
chining. These items sum up to the "Section 6 total." 

The detail of the estimate is now complete. Sections 1, 
2, 3, 4, 5 and 6 totals shall now be brought down to the 
bottom of the estimate form in the summary section. To 
the right of these totals appears the profit for each item as 
well as the percentage which the profit represents of the 
estimated cost. Methods of figuring profit are considered 
in Chapter VII. The cross-addition of the total and profit 
items represents the amount for the selling price columns. 
This selling price is divided by the quantity of pieces in- 
volved and the per piece selling price carried out into the 
right-hand column. The footing of these 6 items gives the 
total estimated cost and total profit, from which is obtained 
total selling price and total selling price per piece for the 
work covered by the estimate. A line is also provided on 
which to show the sum of the price per pound in cases 
where it is desirable to express the price in such manner. 
It should be noted that the profit is not determined on a per- 
centage basis. The percentage column in the summary part 
of the estimate sheet referred to shows how much the per- 
centage of profit actually is. It is simply a statement of 
fact and not an indication of the method of determining 
the said profit. 



LECTURE XIX 

PROFIT AND RELATIVELY TRUE SELLING PRICES 

7-A. Per Productive Hours. 

7-B. Per Pound. 

7-C. Per Piece. 

7-D. Per Cent of Cost. 

7-E. Mutual Satisfaction. 

VIII. Conclusion. 

The following discussion of the above subjects is reprinted com- 
plete from Chapters VII and VIII of the author's "Predetermination 
of Prices." 

In the preceding- chapters the various factors involved 
as influencing the determination of true costs and the com- 
putation of estimates have been considered. Reference to 
Fig. 1 6 will show a record of five methods used in determin- 
ing profits. 

The profit of a business is a variable circumscribed by 
very broad limits, because the factors which should, seldom 
control it. Scientifically, profit can be intelligentlv figured 
if it is based upon correct, absolute costs. It is the writer's 
object to show a systematic method, based upon working 
practices, of computing profits to suit each of several actual 
conditions confronting a business man. 

It goes without saying, of course, that it should be the 
object of every manufacturer to get as large a margin of 
profit as possible consistent with the foundation of a per- 
manent business and commensurate with the quality of 
product to which that profit applies. 

Prices should not necessarily be fixed by a definite mar- 
gin based on the cost of a job, but sometimes by the value 
of that job to the consumer. There are cases, of course, 
where the actual cost of production is out of all proportion 
to the intrinsic value of the piece as determined by ordinary 
standards. In such cases the oddity of the job and the com- 
plication of it give a cost apparently out of proportion. 

1 08 



FREDERIC A. PARKHURST IO9 

This, of course, is the customer's loss in one sense of the 
word and he must expect to reimburse the manufacturer to 
the full amount of the cost plus a reasonable profit. 

In general, a reasonable profit should be interpreted as 
meaning a profit based on what is a fair allowance over 
and above the elements (direct and indirect) entering into 
the cost of the product. The author does not believe that 
there is a first-class up-to-date concern that will not be will- 
ing to buy — all things being equal — at a price which will 
net the vendor a profit of, at least, 10%. This being the 
case, the matter simmers down (on a close competitive basis 
of price fixing) to a certain amount added to the total cost 
of the work including all items of cost (direct and indirect) 
based on an honest distribution of overhead or burden. 
This 10% may be added to the total cost of the job, as 
shown by the cost summary, which, of course, must include 
all differential burden, both hourly and pound. 

The fact should not be lost sight of in adding profit to 
determine a selling- price, that under the science of manage- 
ment a firm has more to sell than its visible product. It has 
engineering and technical ability to put at the customer's 
disposal. It has service in the broadest sense of the word. 
It assures quality and maximum production. All these 
factors guarantee positive and definite shipping schedules. 
They make it possible to not only . sustain the prevailing 
prices, but to work toward an automatic adjustment of 
prices based on the "value received" 03^ the buyer. 

7-A. Per Preductive Hour 

In the majority of business the writer prefers the method 
of basing profit upon the productive hour except in cases 
where necessity makes some other basis apparent. It is 
just to assume that with a given plant and investment 
running under fairly normal conditions, a certain net profit 
should be realized. Of course the figure depends on the shop 
conditions and the kind of work handled, but any invest- 
ment should realize for the owners a fair percentage of 
profit after all items of depreciation, expense of operation, 



HO PER POUND 

reserve charges, etc., have been taken care of. It should be 
borne in mind that the net earning in dollars and cents 
which capital desires to realize also represents a certain 
working capacity. This capacity can be brought down to 
a figure representing productive hours. These productive 
hours divided into the amount representing the desired earn- 
ing capacity gives the rate per productive hour to figure as 
a profit. Such an hourly profit figure is then used in connec- 
tion with costs and estimates. 

If one realizes that the entire basis of production and 
payment is time, one expects to earn in a given time a net 
amount of profit amounting to a certain figure. The profit 
must be earned by the expenditure of so much direct time 
to turn out that product. 

In figuring the profit on a basis of so much per productive 
hour, it is assumed, of course, that the indirect expense 
covers everything in connection with miscellaneous ma- 
terials, bad accounts, etc. The productive hour basis of 
figuring profit represents a net profit for every direct hour 
of work applying on the job. 

7-B. Per Pound 

The pound basis of figuring profit is applicable to cer- 
tain lines of business where the percentage of labor is small 
and where the logical unit to use is pounds or tons. This 
method is the most commonly used in computing estimates 
and profits in the average foundry business. Personal ex- 
perience forces me to consider it an entirely erroneous 
method to use in connection with foundry work. If profit 
is figured on such a basis, the same error occurs that is 
developed by the distribution of indirect expense, exclu- 
sively, on a pound basis. Many foundry jobs require a 
great many hours' labor to get out a comparatively small 
tonnage, while others require very little labor to get out a 
very large tonnage. It is not safe to rely entirely on profit 
at so much per pound. 

The profit on foundry work in the majority of cases, 
assuming the average variety of work with its many fluctua- 



FREDERIC A. PARKHURST HI 

tions and variations, should be figured on a basis of so 
much profit for each direct hour expended on each indi- 
vidual job. It is true that some figure might be included 
as a small factor on the pound basis. This should only be 
used, however, to compensate for some variation which 
could be corrected only by the use of a pound factor. 

7-C. Per Piece 

The determination of profit on a basis of so much per 
piece is the logical method to use in cases where the pro- 
duction is one in which the logical unit of measurement is 
piece. The ratio would need to be a fairly constant one, 
however. Assume a condition where a concern is making 
but one or a very few different articles, where the produc- 
tion is large and the labor fluctuation is small, then a piece 
profit may be a logical method to use. In other words, if 
the desired profit on a certain volume could be as well 
figured at so much per piece, and the piece unit is the con- 
ventional term to apply to that product, then it is logical 
to figure profit at so much per piece. 

In considering the use of the piece profit understand 
that the method is recommended only where, no complica- 
tion occurs, from the possible changes in product, which is 
involved by a number of kinds or sizes of pieces. In a 
business where the production is controlled in a large meas- 
ure by automatic or semi-automatic machines, where the 
labor ratio is low, the piece basis of figuring profit is a 
logical one. 

7-D. Per Cent of Cost 

This basis has certain advantages, particularly when ap- 
plied to miscellaneous or experimental work which does not, 
perhaps, represent any part of a certain line of product. 
Even then the fact must not be lost sight of that a large 
fluctuation in direct hours on various jobs is after all the 
chief factor in work of such kind. It is probable that the 
per cent of cost should more often be used in conjunction 
with the hour method, so as to cover a percentage of profit 
on quantities of material purchased for these special and 



112 PER CENT OF COST 

experimental jobs. On this class of work there is a certain 
expense directly incurred in connection with purchases, stor- 
ing, handling of material and the carrying of accounts for 
such material not part of a regular stock on which it is 
fair to add a small percentage of the cost. This percentage 
may be figured exclusively on the material. Then the direct 
productive hour profit could be added as the regular profit 
rate, thus taking care of the large volume of direct labor 
involved. 

There will be cases where there is some advantage in 
using a combination of several methods of determining 
profit. As suggested in the preceding paragraph, the com- 
bination of a per cent and a productive hour basis is often 
desirable. On the other hand, the indirect expense items 
going to make up burden and which are charged into the 
cost in any event, ordinarily take care of all items of cost 
affecting the handling of material, carrying of doubtful and 
bad accounts, etc. 

7-E. Mutual Satisfaction 

It is a well-known fact that a great many commodities 
are sold on the established market prices. Supply and de- 
mand ordinarily determine the market price on a great 
many commodities and materials. The difference between 
the available market price and the cost of the article to the 
producer ready to ship represents a margin of profit which 
in one sense can be described as a mutual satisfaction profit. 

The term "Mutual Satisfaction" more particularly, how- 
ever, applies to cases where a patented article is sold at a 
price a great many per cent higher than the true cost of 
it to the manufacturer. On the other hand, the article in 
question has a value to the customer regardless of what it 
cost the manufacturer. If an article is manufactured for 
$i and can be sold for $2.00 or $2.50, and the customer 
is perfectly willing and glad to pay $2.50 for it, the margin 
of $1.50 represents a mutually satisfactory profit. 

There are many special machines which have cost a great 
deal to develop, selling at a price which apparently repre- 



FREDERIC A. PARKHURST II3 

sents a very large margin of profit over the total cost to 
the manufacturer. On the other hand, the purchase of such 
a machine enables the purchaser to turn out his product very 
much cheaper than he could otherwise do ; and he is only 
too g'lad to buy at a price which allows the manufacturer 
of the machine a very large margin. Mutual satisfaction 
is undoubtedly the best term to use in describing this 
method of determining profit. After all, a satisfactory and 
fair price is one which both vendor and purchaser mutually 
agree upon in a transaction between two. If both are con- 
tent there can be no logical argument against such a method. 

It is not the intention to suggest or advise the asking of 
an exorbitant profit, just because the product is one which 
the other fellow cannot buy elsewhere. If a vendor charges 
an exorbitant margin of profit, he is inviting' a competition 
which, though it may involve expensive designing and the 
invention of new methods, will eventually lead to getting 
on the market an article to compete with his. Competition 
is, of course, a good thing. At the same time there is a 
limit, and the average manufacturer will find that he ordi- 
narily has more to gain by not getting the habit of charg- 
ing exorbitant prices than he has by trying to boost values 
beyond a fair limit. A good safe margin of profit which 
shall amply protect against times of bad business, so mak- 
ing the average a fair one, is a much better policy and will 
result in a more permanent and staple business. 

A purchaser is better satisfied to buy a product netting 
the manufacturer a good margin of profit, when that manu- 
facturer bases his profit on accurate costs. A complete 
method of detailed distribution of costs permits the manu- 
facturer to charge to his orders a fair margin of profit, 
equally, on practically all of his product. One firm is not 
paying an exorbitant profit on his order to offset the loss 
on another firm's order. There is a great deal of business 
being handled in these days at a loss, because the manu- 
facturer does not know how much one article costs as com- 
pared to others. If he doesn't know the individual cost of 
an article how can he lower the cost on the unprofitable 
article? 



114 MUTUAL SATISFACTION 

As first stated in these pages, it is not sufficient to know 
weeks after a job has been completed how much it will cost 
and how much you can sell it for. This information should 
always be at hand within a very close limit of variation 
before the order is placed on the books. If the methods 
described here are followed, the result will be a very marked 
change in the figures representing the cost of various arti- 
cles produced. Some of the supposedly profitable product 
will be found to be exceedingly unprofitable, and that part 
which was supposed to be unprofitable may be found to be 
most desirable. In any event, the net result of the rear- 
rangement will be a set of figures which will represent true 
cost. These true costs plus a fair margin of profit will 
result in a relatively true selling price. 

A firm no longer needs to bid at so much a piece, or so 
much a pound, or name such and such a price for an article 
because it thinks competitors are going to quote approxi- 
mately so much. Too often prices are quoted, based on the 
assumption that a competitor will hold to a certain figure 
and, "if we want the business we had better quote about 
so much less." A firm knowing its true costs and selling 
prices need never be afraid of quoting any selling price 
regardless of what he thinks the other fellow may quote in 
competition. No good business concern wants to buy an 
article because it can buy it the cheapest as far as the face 
price of it is concerned. What the customer wants is good 
service. He is willing to pay a price that will allow the firm 
giving that guarantee of service a living profit. The firm 
deciding to quote by guess-work methods may have some 
luck for a while, but must somehow, sometimes, shirk 
something to "break even" on guess-work prices. 

"All is not gold that glitters." Analyze your product. 
Know your costs. The firm having true costs data at their 
command need never fear competition, providing they real- 
ize soon enough that they must also have a competent, pro- 
gressive, and up-to-date sales organization with confidence 
in its prices. Without the latter, their true costs and rela- 
tively true selling prices will avail them little. 



FREDERIC A. PARKHURST II5 

8 — Conclusion 

This book covers what is probably the most vital branch 
of any business. Without true costs on which to base sell- 
ing prices, the stability of any business is, to say the least, 
uncertain. The reader must not for a moment imagine that 
the definition of the word cost as the author uses it is that 
limited by, the dictionary. In other words, we should not 
continually strive toward lower relative costs at the expense 
of, nor to the knowing detriment of our fellow-worker or 
employee. 

Today we no longer associate the lowest cost Math the 
least output in wages. In establishments employing the 
most modern methods involved in the science of manage- 
ment the lowest costs are realized when the remuneration 
to the employee reaches the peak. Nor is the cold-blooded 
comparision of facts and figures the only measure of value. 

Modern striving for low costs, which under proper and 
scientific management pays the highest wage, has resulted 
in the improvement in a marked degree of working condi- 
tions, as well as in the personnel itself. It is true that 
many of the physical improvements in factory, equipment, 
tools, safeguarding life and limb brought out in recent 
years have often been prompted by selfish motives. On the 
other hand, this work is becoming more and more general 
from a strictly humanitarian standpoint. 

We cannot overlook the personal factor. We realize as 
time goes on that the satisfied and well-paid worker has an 
economic influence which far exceeds his direct monetary 
value to his employer. The highly paid workman has a 
highly stimulated interest in his work. He becomes a 
thinker. Being a thinker, he becomes better able to dis- 
criminate between what is good for him and that which 
is likely to prove detrimental. To continue his high pay, 
he continues to care for himself. His opportunities are 
greater. He lives better and does more for his family. 

Other effects of this higher pay to the workman come 
from his desire to better educate his children and become a 
better citizen. He spends more and he saves more. As 



Il6 CONCLUSION 

he begins to realize these things and what these changes 
mean, he becomes a potent economic factor in public life. 
His work is more productive, as he does more of a better 
quality. He co-operates with his employer and his em- 
ployer's organization. In other words, he is more or less a 
partner in the business in that he gets a special extra remun- 
eration for his cost reducing value, and he gets it in cash 
every week with no questions asked. His bonus increases 
as his efficiency increases. 

All of the foregoing has its direct effect on costs. Not 
because of the fewer hours spent to do a piece of work. 
Far more important is the moral, harmonious and coopera- 
tive influence of an efficient individual in an organization. 
Only by such a condition can control be obtained of all the 
elements entering into costs. 

Economical operation and low cost means the maximum 
efficiency in output of energy, high wages, and a conser- 
vation of material and labor. A dollar saved is ioo per 
cent, profit. A one dollar order from a customer may mean 
10 cents or 15 cents (10% to 15%) profit. In the future 
the successful business will begin its economy by eliminat- 
ing wastes rather than by cutting wages and the sum total 
of expenditures for a given output will become the objective 
point of attack from which to eliminate. 

Goethe said, "If the world is not governed by figures, 
they at least show how the world is governed." If the 
American business man, with his command of unlimited 
and unexcelled resources of practical thought, capital, 
equipment and energy, will govern his industrial world by 
"true" figures and not guess work, his supremacy and that 
of the American workman will be impregnable. 



LECTURE XX 



THE TOOL ROOM 



6-A. The Standardization of Methods and Tools. 

XXVIII. Instruction for Tool Foreman. 

XXIX. Instruction as to Tool Requirements. 

XXX. Instruction for Care and Storage of Tools. 

This lecture will discuss the details incident to the standardization 
of methods and tools under section 6-A. forming part of Chapter VI of 
the text. 

The three instructions above noted will also be discussed in detail 
and will be found in the Appendix of the text. 



117 



LECTURE XXI 



MANUFACTURING AND ERECTING 

6-B. The Development of a Manufacturing System. 
6-C. The Handling of Erection Work. 



The above subjects will be discussed in detail following Chapter 
VI of the text, with additional discussion of the work in other 
factories. 



118 



LECTURE XXII 



TIME STUDY AND BONUS 

7-A. Introduction of Time Studies. 

7-B. Analysis of Time Studies and the Development of In- 
struction Cards. 



The above subjects will be discussed as outlined in Chapter VII of 
the text, so as to follow the organization lineup at the Ferracute Ma- 
chine Company. 



II 9 



LECTURE XXIII 

time study and bonus (continued) 

7-C. Discussion of Piece Work, Premium, Bonus, Differential 
Rate and Differential Bonus Systems of Wage Payment. 

7-D. Method used by the Author to Compute Differential 
Bonus. 



This lecture will discuss the two remaining parts of Chapter VII 
of the text, completing the study of this part of the subject as applied 
to the Ferracute Machine Co. 



I20 



LECTURE XXIV 

time study and bonus (continued) 

9. The Control of Methods and Labor through Time Studies 

and Sub-Operation Times. 
10. Time Study Foreman. 

This lecture will discuss in further detail the work necessary inci- 
dent to time study and bonus as indicated by the two above mentioned 
divisions which are reprinted complete from the author's "Scientific 
Management in the Foundry," sections 9 and 10. 

The discussion of the subject in this lecture will cover considerably 
more detail than did the preceding lectures on the same subject and 
will also give the student an idea of the elements involved in the study 
of foundry methods. 

9 — The Control of Methods and Labor Through Time 
Studies and Standard Sub-Operation Times 

All of the above mentioned pre-requisites have their value 
as a part of the whole. The actual savings they effect are 
very great, but we come now to the most radical part of real 
scientific management, that part which helps us immensely 
in the development of all the branches of management that 
have been mentioned earlier in this article and that part 
which makes possible a larger production than is otherwise 
obtainable. 

Fundamentally we must obtain a thorough knowledge of 
all factors in a condition to scientifically control it. To do 
this we must first carefully analyze each thing we have to 
do into all its elements. Having done this the next step is 
to take up each branch or element individually and one at a 
time. The chief element aside from material in foundry 
work is labor. 

The control of methods and the necessary labor element 
are closely related. In one sense the method is distinct 
from the labor necessary to make that method effective. On 
the other hand we cannot dispense with the labor. Our 
method may contemplate the most complex and efficient 

121 



122 CONTROL OF METHODS AND LABOR 

mechanical appliance, leaving but little for the human ele- 
ment to do to realize great productiveness from it. Yet, 
to repeat, we are helpless without the human factor. 

In the perfection of methods we bring to bear specially 
trained minds. The material and tools to be used are care- 
fully determined. The proper combinations of help ( if it. is 
gang job) are agreed upon. So too are the sequence of 
operations and the time each shall take. All of these factors 
are determined by careful study combined with the use of 
the stop watch. 

To best describe the author's method of making time 
studies he gives below a modified copy of a set of instruc- 
tions covering the duties of a time study foreman. This 
instruction applies to a man in charge of time study work 
in one of the large foundries in which the author is install- 
ing his methods of scientific management. A large amount 
of detail applying to that particular business has been 
omitted for obvious reasons. The author hopes that the 
following will impress the reader with the great importance 
of this part of the work. Time study work well done is 
the key to the success of the entire scheme. If improperly 
or incorrectly carried out it is bound to plung'e the entire 
scheme of organization into chaos. The final outcome can 
be readily foreseen. 

10 — The Time Study Foreman 

The Time Study Foreman is a member of the planning 
room force. He is a functional foreman and is directly 
under the Production Clerk. Until the new methods are 
thoroughly operative, however, the Time Study Foreman 
will be directly under the Organizing Engineer and will be 
responsible to him only. 

These instructions cover the duties of the Time Study 
Foreman and his one assistant. They are of course equally 
applicable in the event that there are more than two men 
employed on this work. The time study men are imme- 
diately responsible to the Time Study Foreman, who will 
be held strictly responsible for all branches of their work. 



FREDERIC A. PARKHURST 1 23 

This also applies to men detailed temporarily from other 
plants for instruction in time study work. 

Too much stress cannot be laid on the importance of 
the work covered by these instructions. This applies both 
to the relative importance of this branch of the work to the 
entire organization as well as to the fact that it is the most 
important single element of the whole. The success of the 
entire bonus system is dependent on the reliability of the 
work of the Time Study Foreman and his assistants, and in 
the accuracy of their investigations and records. 

The observer or time study man should be a skilled man 
of the trade under investigation. It is not absolutely neces- 
sary that he be the fastest worker in the shop, but he must 
be one of the best. Pride and enthusiasm in his work are 
two of the chief essentials. To these may be added sound 
judgment and an unbiased mind, and above all things, he 
must be patient, exacting and extremely diplomatic. Many 
opportunities will arise for carrying tales. Care must be 
taken in conversation with the men that nothing is said 
which can be misconstrued. These things make trouble and 
must be absolutely avoided. A man who cannot observe 
these regulations will not be allowed to have anything to do 
with time study or bonus work. 

The time study men must study the man as well as the 
job. They must win and retain the confidence of those 
with whom they come in contact. The time study men are 
functional foremen in every sense of the word. As such 
they come in contact sooner or later and more or less often, 
with every workman in the shop. 

The observer when making a time study, should be sure 
to fill in all the information required at the top of the time 
study form, as indicated by the printed matter. The Sub- 
stance of the "note" at the top of this form should always 
be borne in mind. Each job must be carefully and thor- 
oughly analyzed into its various elements. The best se- 
quence of operations, as well as the proper tools, feeds, 
speeds and cuts (if a machine job) must be determined be- 
fore the study is completed. This is a most important 



124 TIME STUDY FOREMAN 

record and must always be complete in itself for later ref- 
erence. 

First of all there are a great many standard elemental 
times to be determined and tabulated for us in connection 
with time studies and instruction cards. These elements 
occur repeatedly on all work of whatever nature which may 
be done in the different types of machine or by hand. Once 
determined, they represent a standard to be used in the 
future for that particular machine or group of like machines 
or other equipment. - In addition to the above, full data 
must be tabulated covering all details of capacity, power, 
adaptability, etc., of each machine, maximum feeds, cuts, 
speeds, etc. Other elemental times are also necessary to 
the expediting and standardizing of this work. For ex- 
ample, standard time allowances for setting different kinds 
of work in different types of machines, different sizes and 
styles of clamps and bolts, time needed to raise different 
weights from floor to machine, both by hand for small parts, 
and by crane or hoist for larger ones. Different trades, of 
course, all have different elemental operations. 

All of these elemental times represent a much larger pro- 
portion of a man's daily work than any one would at first 
imagine. Although the class of work being done in a shop 
may vary greatly, both in sizes and shapes, a great deal of 
a man's time is consumed daily in doing the same thing 
over and over again. This statement applies to getting 
tools, starting and stopping his machine, setting and unset- 
ting tools, making adjustments, performing hand opera- 
tions, etc. Until an actual record has been made of the time 
so consumed, and this record compared with the time the 
same operations should take as proved by stop-watch obser- 
vations, no one will be convinced of the true state of affairs. 
The analysis of new work into its elements then becomes a 
mere matter of applying standard elementary times to most 
of the elements and calculating or observing the times for 
the remaining few. 

Before starting to make a time study, the right work- 
man must be chosen for the job. He must be a fast and 



FREDERIC A. PARKHURST 125 

conscientious worker and skilled at the kind of work, or 
branch of the trade, under investigation. If such a man is 
not available, and a "green" man is to be broken in, the ob- 
server must demonstrate the various elements as the study 
progresses. First of all (other conditions being propitious), 
the man chosen to do the job must be one who is strictly 
loyal and thoroughly in sympathy with the new methods. 
Having chosen such a man, it is generally good practice to 
pay him 25 per cent of his hourly rate as a bonus for follow- 
ing instructions anad while working under the watch. This 
payment should only apply as long as he continues to con- 
scientiously do the best he can to assist toward an accurate 
and fair time study of the job in question. After a number 
of different men have become accustomed to working under 
the watch, this 25 per cent bonus should be regularly paid 
to each man when working under these conditions. 

It will be somewhat difficult at first to win the operator's 
good will and hearty co-operation. When it is made clear 
to him that there are many elements in the job which can 
be improved, such as a different way of rigging up the job 
in the first place, or certain combinations of speeds, feeds 
and cuts, and that he has a chance of earning from 20 per 
cent to 40 per cent more wages under the new scheme, you 
have then brought home to him wherein he is to benefit. His 
work will at once become more interesting; hence, he can 
do much more work with less fatigue. A man's mental con- 
dition and environment are two factors which exert a most 
far-reaching influence on his output. His own and the 
employer's interest both require that these two factors be 
given careful consideration. Under these conditions each 
man is enabled to stand on his own feet. He is assured of 
the remuneration that is commensurate with his ability. He 
will not be wholly subject then to a prevailing rate of wages, 
which in so many cases is most unjust to both employe and 
employer. 

Having chosen the man, the job must be studied and an- 
alyzed. This may require much experimenting by trying 
out one method after another. The tools and fixtures to be 



126 TIME STUDY FOREMAN 

used must also be determined and listed so that for future 
repeat orders the proper tools may be made ready in the tool 
room and moved to the machine. This should be done in 
advance of the time the job is scheduled to start. The ma- 
terial must also be on the floor or at the machine or job. 

In making a time study, every distinct sub-operation must 
be timed separately. All time is expressed in minutes and 
decimals on the time study form (see Fig. 6) after which 
the time is transposed into hours and decimals and figured 
to the nominal production per nine-hour day. Operation 
times that are too short to be accurately timed individually 
may be calculated. This may be done by taking the time for 
say four sub-operations, then by deducting the time taken 
for three to get the time for one. As the study progresses, 
all unnecessary time should be noted and deducted. This 
includes time lost due to a man's too slow movements, wait- 
ing for or preparing tools, as well as delays from any other 
source not necessary to the proper performance of the work. 

After the work is under way, several time studies from 
different pieces of the same lot (if there are more than 
one) should be made on the one form. Three columns are 
provided for this purpose. In addition the column to the 
right is to be filled in showing the time that is finally decided 
on for each sub-operation. Eventually all elemental times 
will be standard and the times shown for them on the time 
study form will be ignored except to account for much waste 
time. Ten or twelve sheets are often required for one piece, 
or job, if it be a large or intricate one. The time study 
when completed will show all the detail times, equal in 
amount to the total elapsed time. It must be borne in mind 
that each study is based on a certain design of piece, made 
of a certain material, using specified equipment and tools, 
and is not to apply if one or more conditions are changed. 
The man, however, is the variable factor. 

The kind and quality of material has also to be laken into 
consideration. Lack of material or faulty equipment will 
often prevent a man from earning bonus. The difference 
in quality of the material is beyond the control of the man, 



FREDERIC A. PARKHURST 12J 

and if it prevents his earning a bonus, the management must 
expect to make an adjustment. No allowance, however, is 
to be made for delays in manipulation of the machine, work 
or tools. A shut-down of the machine for adjustment, 
cleaning, or minor repairs, will not be allowed unless it is 
shown beyond question that these delays were in no way 
due to the operator. In some cases, however, the job may 
be stopped, due to any of the above mentioned delays, and 
the operator put on other work. When the job is finally 
resumed, the total time elapsed while it was being worked 
on is used in determining the time per piece. It is up to 
the functional foreman to see that the machine and equip- 
ment are in proper shape before work is started on any job. 

It must not be assumed that it is always an easy matter 
to get a sufficiently accurate time study, and hence a good 
set of instructions. In point of fact, time studies some- 
times have to be made at different times from several suc- 
cessive lots or jobs before a satisfactory instruction card 
can be issued or a bonus rate set. The time study man must 
often spend several consecutive days on one job, before he 
can get a satisfactory study. When this has been obtained, 
however, it is a comparatively easy matter to write up the 
instruction cards. These instructions, when written, form 
the permanent standard for that operation, until a change 
in one or more of its conditions necessitates a new one. The 
record in itself looks simple, but the preliminary work in- 
volved can be only appreciated by one who has been actively 
engaged in this kind of work. 

The reader must not be misled in thinking that after 
a satisfactory time study has been taken and the instruction 
card made out, there is nothing more to be done. As often 
as not, this point marks the beginning of a more or less 
lengthy period of patient and systematic coaching*. In the 
first place, several different men will probably work on as 
many successive lots. Until these men have been thor- 
oughly accustomed to bonus work, they will not perform 
the operation as fast as they can eventually. This is true 
also of machine operators who perhaps run the same ma- 



128 TIME STUDY FOREMAN 

chine from one end of the year to the other, but on many- 
kinds of work. Most men are more adept at one class of 
work than they are at another, even though it is performed 
on the same machine. Again, their mental attitude must 
be considered. They think that although they can earn 
ten or twelve cents an hour bonus on one job, they can make 
nothing on some new job. All these conditions and differ- 
ences of opinion must be met and the employe instructed un- 
til he becomes proficient on each job put to him under bonus. 
This method also results in placing men at the work they 
are best fitted for. They cannot continue to work indiffer- 
ently for perhaps years when they should have been on 
other jobs or working at some other trade. The writer 
has in mind a number of jobs which took from six to four- 
teen months of unremitting, patient labor on his part before 
a cent of bonus was earned on them. 

If one or more men do not begin to immediately earn 
bonus after a bonus price has been set, the circumstances 
must be taken into consideration. They must be given an 
opportunity to appreciate the fact that the job contains ele- 
ments which they were before unfamiliar with. Make them 
realize that they have been shown how they can do the 
work quickly if they are so inclined. I quote an example 
which came up in our core room the other day, which is a 
particularly good illustration of this point. I refer to a half 
housing core, core box 3, for a transmission, bonus chart 
No. 53. This job had been run under day work from 75 
to 85 cores a day and in the judgment of the foreman 90 
cores could be made in nine hours. A time study on this 
job was made personally by the writer and afterwards a 
more systematic study was made by the Time Study Fore- 
man. The result was that the job figured .83 minutes per 
core. Making an allowance of about 10 per cent, the maxi- 
mum bonus production was figured on a basis of 0.9 min- 
utes per core. This means a production of 600 cores per 
day for one man at the bench. Bonus was started at 70 per 
cent of this production (420) and the chart above referred 
to was issued on this basis. 



FREDERIC A. PARKHURST 1 29 

It is a pretty radical proposition to take a "75 to 90 a 
day" job based on the best judgment of the man in charge 
of that department and attempt to jump it to 420 before 
the man can earn any extra remuneration. The man who 
had been working on this job refused to work under bonus 
and walked out. A strange man was put on the job and 
for the first day's work made 460 cores. On the second day 
he made 537. The foreman in this department then ad- 
mitted that he believed a man could make 600 of these cores 
in nine hours. The job after a few days ran from 550 to 
600 per day. This example is recorded here as a good illus- 
tration of the apparent radicalism of some of the results de- 
sired under new methods. 

Be perfectly sure of your facts, then instruct and assist 
the men in every way in realizing the results you aim for. 
Keep an accurate record of the time you consume while 
making each time study and if the men are cooperating with 
you and trying in every way to assist you in making this 
study, see that a bonus pay slip is turned in for an amount 
equal to 25 per cent of their wages for the time they were 
working under the stop watch. Be perfectly open and frank 
with them while taking time studies and do not get the habit 
of letting them think you are taking time studies secretly. I 
am not referring now to making the general superficial 
study of the job and taking the elapsed time, keeping the 
watch in the pocket. This method is allowable under cer- 
tain circumstances as long as it is done discreetly and just 
as a rough check on conditions. There are only a few cases 
where such a method is necessary and the writer knows of 
none where it is desirable. 

When taking time studies or arranging the order of work 
and teaching the men how to perform such work, be sure 
to make them realize the advantage of working at a 
steady gait. Do not let the men continue the habit which 
a great majority of them have; i. e. trying to put up a 
large proportion of the day's work during the morning 
period. We have been able to get our men away from 
this habit and it will be noticed that on practically every 



I3O TIME STUDY FOREMAN 

bonus job now running an average gait is maintained 
throughout the day. If the jobs were checked over at noon, 
you would find that almost invariably there is 5-9 of a day's 
work completed at 1 1 :3c Such a condition is a most de- 
sirable one; the men can do more work with less fatigue 
than in any other way. For general information, it may 
be mentioned here that there is a certain limit to which a 
man can go before becoming unduly fatigued. If a very 
short rest period is taken at this time, a matter of only a 
few moments even, it will recuperate a man so that he can 
resume at his maximum speed. Let him work a little 
longer, however, at his maximum speed and it will not re- 
quire a proportionately increased period of rest to recu- 
perate, but the period will have to be many times longer. A 
slower average gait steadily maintained as above stated re- 
quires a great deal less effort for a greater production. 

As each job is taken up and investigated preparatory to 
making a time study, be sure to get an accurate record of 
how the job is run, the number of men, and their rates. 
Also get an accurate record of the production per clay both 
in gross work and net amount of good castings, cores, or 
whatever unit applies to the job. This information is very 
essential for comparative purposes as well as to check out 
your cost after you determine the new way of arranging 
the job combined with the anticipated production. Very 
often it is necessary to change a method and at other times 
it is a very undesirable thing to do. 

After you plan the arrangement of a job on the floor or 
bench, be sure to see that you provide a sufficient quantity 
of material. No matter how willing the men they cannot 
work to advantage (nor can you get a satisfactory study) 
if the flow of material is not sufficient to keep the gang 
well supplied and far enough ahead so that they do not see 
the possibility of a tie-up. You must not forget that the 
average workman is very clever at gaging his speed to suit 
conditions. Do not under any circumstances think that 
the men you are dealing with are fools, especially if they are 
of a different nationality and do not understand English. 



FREDERIC A. PARKHURST I3I 

You will find that the minds of such men are peculiarly 
active. They are very quick to see an opportunity and 
take advantage of it. They are also exceedingly sensitive, 
far more so than the average better educated person. 

Restrict each job, whether it is a one man job or a gang 
job, to a certain but sufficient amount of floor, rack and 
bench space. Be careful to make your arrangement of 
work such that the different material and equipment is 
handy and can be reached and manipulated without an un- 
due amount of travel or useless motions; on the other hand, 
allow sufficient room to work to advantage. 

It is a mistake (except perhaps in isolated cases) to work 
more than two to six men and boys in a gang on bonus. 
The individuality of each man is lost and no one in the 
gang can work to the best advantage for several reasons : 
chiefly because men vary in capacity. When in too large 
a gang all are not congenial, are apt to be more or less 
jealous and antagonistic, or feel that each one is not doing 
his share and hence holding - the others back. Work which 
can be done by a large gang must be so divided into sections 
that each section can be handled as a unit by one or two 
men. The result is the equivalent of a number of small 
individual units or jobs which at a certain stage of comple- 
tion, are themselves assembled in a short time, and perhaps 
by a number of men, into the completed work. In a case 
of this kind each unit or section is inspected separately as its 
assembling progresses. The final inspection takes place 
after the work is complete. 

In the capacity of a time study man be careful to avoid 
any suggestion of usurping the authority of the foremen 
or gang bosses. They fully understand the relation of your 
work to their own ; at the same time when you are ordered 
to take a time study of a job, arrange with the foreman 
and let him formally turn the men over to you. Very often 
the foreman will have good reasons for wanting to post- 
pone the starting" of such an investigation. These reasons 
may be due to promises that he has made in regard to his 
work, or to the fact that there is some change in equip- 



132 TIME STUDY FOREMAN 

ment being made, etc. Such factors should be considered, 
but in every case report back to your superior. He may 
have more important reasons for wanting the study to 
start at once than those which have been given you for de- 
laying it. Where you have occasion to criticize or suggest 
improvements in methods generally on jobs which you are 
not personally handling, take such matters up with the 
foreman or other proper authority. Do not give men in- 
structions unless it is on a job which has been standard- 
ized. In such cases it is up to the Time Study Foreman 
and his assistants to maintain these jobs in their standard 
condition. 



LECTURE XXV 

time study and bonus ( continued) 

11. Time Study Instructions in Detail. 

12. Standard Elemental Sub-Operation Times for Floor Work. 

13. Standard Sub-Elemental Operation Times for Bench and 

Squeezer Work. 

14. Standard Miscellaneous Data. 

15. General Instructions to Time Study Men. 

This lecture will cover in detail the above subjects reprinted com- 
plete from the author's "Scientific Management in the Foundry" sec- 
tions 11 to 15 inclusive, giving further information as to the applica- 
tion of these methods to the foundry business. 

11 — Time Study Instructions in Detail 

All observations in the form of time studies, either rough 
superficial investigations or detailed stop watch observa- 
tions are to be recorded on the time study form (see Fig. 6). 
These forms are to be numbered in consecutive numerical 
order, commencing at i. Particular care must be exercised 
when starting a study on any piece of work to be sure that 
all of the information called for by the printed matter at 
the top of this form is filled in. When more than one sheet 
is used in recording the time study, these sheets must be 
numbered and the total number of sheets and "sheet num- 
ber" ( — Sheet, sheet — ) filled in on each sheet belonging 
to a set of time studies. 

As a general word regarding time studies, the note 

printed near the top of the time study form should have 

particular attention, namely — 

"The observer must exercise extreme care in making time 
studies to see that the proper sequence of operations is main- 
tained, that all unnecessary operations or moves are eliminated, 
that proper appliances are provided and if machine work, see 
that the proper and most economical combinations of Speed, 
Feed and Cut are used. When time is slow, due to man's natural 
slow moves, note (in margin at extreme right below) what the 
time should be for a fast man moving at his best normal speed. 
Have certain operations repeated if necessary to satisfy yourself 
that the time is correct and continue to do so until the study 
is satisfactory." 

!33 



134 TIME STUDY INSTRUCTIONS 

The note is printed on the form so that it may always be 
a continual brief reminder of the several very important ele- 
ments to be considered in connection with time study work. 
These are elaborated on in considerable detail below but too 
much emphasis cannot be laid on their importance. Each 
time study or observation, whether one of a series of studies 
of standard elemental sub-operations, or a time study of 
some specific operation or job, should always be conducted 
in a systematic and routine manner and in strict accordance 
with the following: — ■ 

a — Take nothing for granted, get all the facts and do not 
jump at conclusions; let these facts lead you to a conclusion 
and you will seldom go wrong. 

b — -Prepare the heading on the time study form above re- 
ferred to, filling in all the data called for. 

c— Use a decimal stop watch and express all time in minutes 
or hundreths of a minute (see Fig. 7). For each sub-operation 
(note explanation in (d) make at least 3 observations. The 
first of these observations should not be made until the job is 
rigged up and arranged in the manner in which it is to finally 
run, until the men have become thoroughly familiar with what 
is to be done, and until they have obtained a maximum amount 
of dexterity in the manipulation of the work or, tools. The sec- 
ond and third observations should not necessarily follow con- 
secutively after the first. Sometimes it will be of advantage to 
do this and at other times, it will be better to make the second 
and third observations at intervals of perhaps several days. The 
conditions of the job and its nature, as well as other influencing 
factors will settle this point. 

The "average time" (for which a column is provided) is a 
matter of calculation and can be done after the study is com- 
plete. Very often, however, it will be necessary to fill in the 
time the job should take (for which the extreme right hand 
column is provided) at the time the three observations are being 
made. Conditions govern this, but there will be occasions when 
there is a definite loss of time on a sub-operation due to certain 
hindrances which can be corrected at the time the observations 
are being made. If the correct time is not noted immediately, 
it may be overlooked. 

d — Reference has been made above to "sub-operation ;" it will 
be noted that on the second line of the heading of the time study 
form, the third item is "operation." (See Fig. 6). Operation 
as here used means the general operation or job under observa- 
tion. This general operation may consist of a great many sub- 
operations, some of them being purely elemental and continu- 
ously repeated, no matter what the particular job is that is being 
worked on. Other sub-operations are special to a particular 
operation or job. This explanation is put in here so that the 
words "operations" and "sub-operations" will not be confused. 



FREDERIC A. PARKHURST 1 35 



To further explain — suppose we are taking a time study on a 
molding operation, say for a simple floor job conducted by one 
man. The entire work of making this mold is an operation. 
Placing the bottom board, setting the pattern, dusting on parting 
sand, setting sprues and risers, setting flasks, shifting the first 
layer of sand, setting nails and gaggers, shoveling sand, ram- 
ming, striking off, etc., are all "sub-operations" of a "molding 
operation." A similar explanation is applicable to coremaking. 
knockout, trimming, soldering, etc., all of which are ''opera- 
tions." Note — See paragraph (g). 

e — The next step is to see that the equipment which has been 
provided for the operation is operative and arranged to the best 
advantage on the floor, bench or other place provided. It is 
essential that no more floor space be devoted to a job than is 
necessary for the maximum amount of work; on the other hand, 
it is equally inefficient, often more so, to provide too little space. 
In work calling for the co-operation of two or more men, their 
respective "sub" or "part" (see g) based on the time they take, 
operations should be so arranged that the men can work in 
unison and with the minimum of delay. Be sure that the tools 
are in first class condition and in sufficient quantities, and that 
the man knows how to handle them. (See m). 

If the best arrangements cannot be determined beforehand, 
make experiments enough to determine this point beyond ques- 
tion before proceeding further. In such cases, see that your 
time study form shows an explanation of what this arrange- 
ment should be. This may be written in the body of the form 
in the column headed "detail description of operations, speed, 
cuts, etc." 

f — Having arranged the above-mentioned preliminaries, the 
next thing is to carefully study the personnel of the employes. 
A careful study of this phase of the problem will show that a 
great many men are misplaced and are doing either the wrong 
kind of work, or are not fitted for the particular part of the kind of 
work they are doing. This is particularly noticeable where gang- 
work is involved. Very often the men doing the hard physical 
labor requiring little or no skill are the men physically less fitted 
for the kind of work. We likewise too often find as a result of 
precedent, a skilled molder employed as a gang boss on a mold- 
ing floor setting cores on a class or work for which only a 
bright, though inexperienced man is necessary. "Misfits" such as 
these are innumerable, except in the most highly developed or- 
ganizations. 

The personal factor is the one great element to be watched, 
studied, "placed" and controlled before permanent improvement 
in methods is possible. All these conditions should be taken into 
consideration as first stated, and the gangs rearranged to suit 
the job on which they are to be employed. Such changes should 
be taken up through the planning room and the department fore- 
man. It is fully appreciated that we cannot always make up 
gangs to suit every individual job. We can, however, regulate 
our work more or less by classes and divide our gangs into 
similar classes. Keep each class of workmen as much as pos- 
sible on the class of work for which thev are best fitted. 



I36 TIME STUDY INSTRUCTIONS 



g — The next step is to study the details of the job and in a 
general way separate it into several parts. For example — if it is 
a "gang" molding job, the work on the cope would be consid- 
ered one general part of the operation and the work on the 
drag would be considered another general part of the operation. 
Other "part operations" would be finishing, core setting, green 
sand coremaking, closing and clamping molds, setting pouring 
cups and cups and dumping out. Study each part of the work 
as though it were a complete "operation" then sub-divide it into 
its sub-operations. In doing this be sure that all unnecessary 
moves or sub-operations are eliminated. Where more than one 
man is working on a sub-operation or part operation, see that 
their respective sub-operations are so timed that they are being 
done together. In other words, if three men are working on a 
cope each of them should have something to do all the time 
that the cope is in their hands ; one or two should not be obliged 
to stand and wait while the one finishes his delayed sub-opera- 
tion. I have timed many jobs where only two men were in- 
volved, and found that they have taken more than twice as long 
as they should for the reason that the above-mentioned points 
were utterly ignored. 

Before taking up the next step, be sure that the division of 
the job into its several parts just mentioned, is complete and 
logical and that you are thoroughly familiar with each sub- 
operation or each part of an operation. Take nothing for granted 
and see and understand for yourself exactly why, when and how 
every sub-operation is performed. Then, and only then, can 
you know how to proceed or feel you are on the right track. 

h — Take each part of the operation and list on the time 
study form in the logical and practicable sequence its various 
sub-operations. Also clearly state under each part the number 
of men involved and where a sub-operation is done by two ot 
more men be sure to note beside it the number of men. In 
timing sub-operations be sure to see that an entire combination 
going to make up the particular operation are working smoothly 
and that the rough elapsed time is fairly even. Having done 
this, each sub-operation can be timed independent of all other 
considerations. Do not lost sight of the fact that the decimal 
stop watch is arranged to stop and start, accumulating time of 
each successive operation and need not be thrown back to zero 
until the sub-operation is completed. If you have started the 
time on a sub-operation and something interferes with the con- 
tinuation of it, or causes a delay, sto.p the watch until the job is 
resumed at this point and at a normal speed. To illustrate — 
you may hold the watch on a sub-operation for twenty minutes 
total elapsed time, but if you follow the above instructions, the 
watch will sometimes show only perhaps five or six minutes 
(or less) as the actual required time for that sub-operation. 

The manipulation of the watch on the above basis (and 
judgment of what time to eliminate) is one of the chief essen- 
tials when taking time studies. If a time study man cannot 
master this part of the work and always be sure of the correct- 
ness of his time studies, he cannot hold his position. You will 
find that the average workman often unintentionally combines a 
great many useless operations. This condition will be found 



FREDERIC A. PARKHURST 



37 



most often where you have laid out a method of operation dif- 
ferent from that to which he has heen accustomed. Under such 
circumstances you must expect him to make mistakes and do 
things in their improper order or do unnecessary things. These 
should be eliminated. In other words, if the above instructions 
have been followed out, you have determined a definite method 
and sequence of operations and you are only expected to take 
the time of these necessary operations. These are the times 
which are to appear in the columns marked "1," "2" and "3" on 
the time study form, figures 6 and 7. 

Do not lose sight of the fact that under the new methods 
each employe has fewer things to do than formerly. Do not al- 
low time taken in getting material to him or his work away 
from him. Preparation and care of tools (dressing, grinding, 
repairing, etc.) are not up to him; neither is inspection, looking 
up and preparing his next job, keeping time and similar work 
formerly saddled on the workman. In the foundries, dumping 
out, pouring off, laboring, etc., are all specialized where formerly 
these things were done more or less by everyone. 

i — In making time studies or observations on other than stan- 
dard elemental operations, it is not necessary to take the time 
of any standard elemental sub-operation involved on that par- 
ticular job. As explained below, all the standard elemental 
operations will be charted and standard times determined for 
them. These standard elemental operations will be numbered 
numerically. Where they form sub-operations as explained 
above, they may simply be referred to on the time study form by 
number. When you come to figure up the right hand column to 
show the time the job should take, the standard elemental time 
should be taken from the standard elemental time sheets. You 
will find that eventually the actual time study work involved will 
be very small, and then only for exceptional work. The time for 
the majority of operations can be taken from the standard 
elemental time sheets. 

j — Under no circumstances base a time study on the speed of an 
unusually fast man ; the same thing applies to the unusually slow 
man, as in either case the result of your time study would be of 
no value. It must be clearly borne in mind that what we want is 
the correct time that the job should take when done by the 
average fast, industrious workman of the type and qualifica- 
tions necessary for that particular kind of work. Do not be 
afraid to take averages and the more time you take as a check 
the better. Furthermore, bear in mind that what time you are 
taking is to be used as a basis for issuing bonus charts, the 
prices on which are under no circumstances to be lowered as 
long as the job remains the same or is done by the same tools, 
equipment, methods, etc., as were in use when the bonus chart 
was figured. It is one of the fundamental principles of my 
methods of Scientific Management that the facts be correctly 
determined in the first place and that a schedule in prices or 
bowus chart is to remain unaltered. The success of the entire 
scheme ninges upon this one thing. You must solicit the co- 
operation of the men, and win and hold their confidence. Super- 
judgment is necessary; be sure you are right and take time 
enough to do your work well. 



I38 TIME STUDY INSTRUCTIONS 

k — Having completed the time study with at least three sets 
of final observations, the average time should be figured out for 
each sub-operation and filled in on the sheet. Sub-operation 
times should be totalled for each part of the general operation 
and these "part operations" compared. Then fill in the time 
that the work should take, doing this by part operations so that 
the various part operation times may be compared. This really 
is the time that you have got to work on. Where it is shown 
that one part of an operation takes longer than another part and 
that these parts must be completed in substantially the same 
time, it is obvious that something must be done to balance up the 
time on the slow part. You know that theoretically the fast 
operation represents the best normal production for the job. 
An extra man must be put on the slow operation or some other 
change made to balance it up with the fast one. When making 
such a change, it is well to make an additional time study as a 
check on your figures before issuing instruction cards or bonus 
charts to the workmen. 

1 — On some jobs, operations, or particular classes of work 
there will be a number of sub-operations which are incident only 
to the entire job as a whole. For example — when a new job is 
started there may be instructions to explain, there may be draw- 
ings to become familiar with, there may be certain arrangement 
of the work on the floor, or in the machine which, having once 
been done, apply to the entire quantity or until the job is com- 
pleted. Such elements in some cases may be standard elemental 
operations or they may be special to that job. In any event they 
are what we call lot operations and the times for them are known 
as lot times. In cases where these lot operations are repeated 
daily, a proportion of their total should be allotted to the opera- 
tion under investigation based on, we will say, one day's work. 
A day's work constitutes a certain given production. The lot 
time distributable to a day's work should be divided by this 
number of pieces based on the time study and an item included 
on the time study to represent the lot time. 

Where lot times are such that they are not repeated, or can- 
not be proportioned to any definite amount of product as may be 
the case where a new job is started, and is being rigged up, this 
time may be or may not be included in the individual piece 
operation time. In such cases it will be assumed that this lot 
time has been spent once and for all, no matter how long the 
job runs. In such a case, consider it a "part operation" and 
get your study of it for further reference. Likewise, where 
there may be certain lot operation times at the completion of a 
job which has run a great many days or weeks, this may be con- 
sidered as a factor not particularly affecting the operation times. 
This is so considered as far as time study work is concerned 
(except as explained above) but of course such distributable lot 
time is all charged up to the cost of the job. 

m— In studying operations as above described, be sure that 
the necessary work at the beginning of the day or at the close 
of the day's work is included in your time study. Such work is 
essentially a lot operation, the time for which is "Lot Time" 
referred to above in paragraph (1). The care which tools 
should be given at night and the order in which the floor, bench. 



FREDERIC A. PARKHURST 1 39 

machine or job must be left should be clearly settled and the 
allowance of time for putting it in such condition provided. 
Such times are primarily daily lot times and are easily distribu- 
table pro rata to each operation performed for the day's work. 
In specifying the condition of equipment be sure that tools which 
are liable to rust are kept clean and well oiled and also see that 
the mechanical equipment provided is kept well oiled and ad- 
justed, either by the operators themselves or by the mainte- 
nance department. Report all cases of abuse of tools. Do not 
let men use a shovel for an axe or as a crowbar. 

12 — Standard Elemental Sub-Operation Times 
For Floor Work 

Reference has been made above to standard elemental 
operations; these are more correctly described as standard 
elemental sub-operation as they are really sub-operations, 
combinations of which form "operations." The method of 
procedure in taking standard elemental times is the same 
as described above in considerable detail and as there stated, 
this description applies to all types of time study work. It 
is essential that before much general time study work is 
undertaken, we determine these standard elemental times. 

The following (see Table I) is given as representative 
of the more important standard elemental operations for 
foundry work. It will be noticed that the following table 
is divided into two classes. One class includes those times 
which are influenced almost solely by the size or weight of 
the flask used. The other class representing those opera- 
tions which are more or less dependent on the kind of 
equipment or method in use. In the first class a different 
time will be realized for each sub-elemental operation for 
each flask in use. In the second class, the same is true for 
each sub-elemental operation for each flask in use, except 
that there is the additional factor that the same combination 
may be used in any one of the five or six methods, namely : 

Bench Molding (Hand & Machine) 

Floor Molding 

Hand rollover machines 

Power rollover machines 

Stripping plate machines 

Jar ramming machines 

Other methods may come into future use. 

The above items are illustrative rather than specific. 



140 



STANDARD ELEMENTAL SUB-OPERATIONS 



TABLE I 



STANDARD ELEMENTAL SUB-OPERATIONS FOR FLOOR MOLDING 



Ref. 

No. 

1 

2 

3 

4 

5- 

6 

7 

8 

9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
35 
36 
37 
38 
39 
40 
41 
42 
43 
44 
45 
46 
47 
48 
49 
50 



Flask 



Sup-operation 

Brush off pattern 
Blow off pattern 
Dust on parting 
Set 10 lb. flask 
Set 20 lb. flask 
Set 30 lb. 
Set 40 lb. 
Set 80 lb. 
Set 60 lb. 
Set 70 lb. flask 
Set 80 lb. flask 
Set 90 lb. flask 
Set 100 lb. flask 
Set 120 lb. flask 
Set 140 lb. flask 
Set 160 lb. flask 
Set 180 lb. flask 
Set 200 lb. flask 
Set 220 lb. flask 



flask 
flask 
flask 
flask 



Set 
Set 
Set 
Set 



sprue 
sprue 
sprue 
sprue 



Set 1 riser 
Set 2 
Set 3 



Tl T2 T3 T4 Etc. 



riser 

riser 
Set 4 riser 
Set 5 riser 
Set 6 riser 
Set 7 riser 
Set 8 riser 
Set 9 riser 
Set 10 riser 
Set 11 riser 
Set 12 riser 
Sift sand ^-inch deep 
Sift sand y 2 -mch deep 
Sift sand on pattern 1 
Sift sand on pattern 2 
Sift sand on pattern 3 
Sift sand on pattern 4 
Sift sand on pattern 5 
Sift sand on pattern 6 
Sift sand on pattern 7 
Sift sand on pattern 8 
Sift sand on pattern 9 
Sift sand on pattern 10 inches high 
Sift sand on pattern 11 inches high 
Sift sand on pattern 12 inches high 
Press sand around pattern 



nch high 
nches high 
nches high 
nches high 
nches high 
nches high 
nches high 
nches high 
nches high 



FREDERIC A. PARKHURST 



141 



51 
52 
53 
54 
55 
56 
57 
58 
59 
60 
61 
62 
63 
64 
65 
66 
67 
68 
69 
70 
71 
72 
73 
74 
75 
76 
77 
78 
79 
80 
81 
82 
83 
84 
85 
86 
87 
88 
89 
90 
91 
92 
93 
94 
95 
96 
97 
98 
99 
100 
101 
102 
103 
104 
105 
106 



Tuck straight bans 
Tuck slant out bans 
Tuck vertical bans 
Tuck irregular bans 
Shovel in 4 inches sand 
Shovel in 5 inches sand 
Shovel in 6 inches sand 
Shovel in 7 inches sand 
Shovel in 8 inches sand 
Shovel in 9 inches sand 
Shovel in 10 inches sand 
Shovel in 11 inches sand 
Shovel in 12 inches sand 
Shovel in 13 inches sand 
Shovel in 14 inches sand 
Shovel in 15 inches sand 
Ram 4 inches sand "light" 
Ram 4 inches sand "medium" 
Ram 4 inches sand "hard" 
Ram 6 inches sand "light" 
Ram 6 inches sand "medium" 
Ram 6 inches sand "hard" 
Ram 8 inches sand "light" 
Ram 8 inches sand "medium" 
Ram 8 inches sand "hard" 
Fill flask 3 inches above top 
Fill flask 4 inches above top 
Fill flask 5 inches above top 
Fill flask 6 inches above top 
Step off 
Butt ram 

Level off "shovel" 
Level off "hard" 
Strike off 
Pull 1 sprue 

sprue 

sprue 

sprue 

riser 



Pull 

Pull 3 

Pull 4 

Pull 1 

Pidl 2 riser 

Pull 3 riser 

Pull 4 riser 

Pull 5 riser 

Pull 6 riser 

Pull 7 riser 

Pull 8 riser 

Pull 9 riser 

Pull 10 riser 

Pull 11 riser 

Pull 12 riser 

Level off before board goes on 

Put on board 

Rub board to good bearing 

Clamp board with 2 clamps 

Clamp board with 4 clamps 

Clamp board with 6 clamps 



142 STANDARD ELEMENTAL SUB-OPERATIONS 



107 Clamp board with 2 clamps and wedges — 

108 Clamp board with 4 clamps and wedges — 

109 Clamp board with 6 clamps and wedges — 

110 Clamp board with automatic clamp 

111 Roll over by hand, 1 man ■ — 

112 Roll over by hand, 2 men — 

113 Roll over by hand, 3 men 

114 Roll over by hand, 4 men — 

115 Roll over by hand, 5 men — 

116 Roll over by hand, 6 men — 

117 Roll over by hand, 7 men ■ — 

118 Roll over by hand, 8 men — 

119 Roll over by hand, 9 men — 

120 Roll over by hand, 10 men — 

121 Roll Tabor hand rollover machine, 1 man — 

122 Roll Tabor hand rollover machine, 2 men — 

123 Roll Tabor hand rollover machine, 3 men — 

124 Roll Tabor hand rollover machine, 4 men — 

125 Roll Pridmore rollover machine, 1 man — 

126 Roll Pridmore rollover machine, 2 men — 

127 Roll Pridmore rollover machine, 3 men — 

128 Roll Pridmore rollover machine, 4 men — 



8-inch 12-inch 



129 Rollover Tabor power rollover machine — 

130 Rollover Pridmore power rollover mach. — 

131 Wedge up under board — 

132 Unclamp (See above item No. 107) — 

133 Unclamp (See above item No. 108) — 

134 Unclamp (See above item No. 109) — 

135 Rap by hand . — 

136 Rap by vibrator — 



Hand Hand 

Tabor Pridmore 



137 Rap by hand and draw pat. on mach., 1 in. — 

138 Rap by hand and draw pat. on mach., 2 in. — 

139 Rap by hand and draw pat. on mach., 3 in.- — 

140 Rap by hand and draw pat. on mach., 4 in. — 

141 Rap by hand and draw pat. on mach., 5 in. — 

142 Rap by hand and draw pat. on mach., 6 in. — 

143 Rap by hand and draw pat. on mach,, 7 in. — 

144 Ray by hand and draw pat. on mach., 8 in. — 

145 Rap by hand and draw pat. on mach., 9 in. — 

146 Rap by hand and draw pat. on mach., 10 in. — 

147 Rap by hand and draw pat. on mach., 11 in. — 

148 Rap by hand and draw pat. on mach., 12 in. — 

By 5 lb. to 25 lb. 
By 10 lb. to 200 lb. 



5 lb. 10 lb. 15 lb 



149 Draw pattern by hand, 1 in. 

150 Draw pattern by hand, 2 in. 

151 Draw pattern by hand, 3 in. 

152 Draw pattern by hand, 4 in. 

153 Draw pattern by hand, 5 in. 



FREDERIC A. PARKHURST I43 



154 Draw pattern by hand, 6 in. 

155 Draw pattern by hand, 7 in. 

156 Draw pattern by hand, 8 in. 

157 Draw pattern by hand, 9 in. 

158 Draw pattern by hand, 10 in. 

159 Draw pattern by hand, 11 in. 

160 Draw pattern by hand, 12 in. 



Time 


for 


each. 


u 




U 


u 




u 










° 1 


u 8 


"J 2 

"•2 . a 


c tf2 c « u 


0^ 


> 1- a— 


n x 


a. 


Pu OT 



161 Draw pattern on machine, 1 in. — 

162 Draw pattern on machine, 2 in. — 

163 Draw pattern on machine, 3 in. — 

164 Draw pattern on machine, 4 in. — 

165 Draw pattern on machine, 5 in. — 

166 Draw pattern on machine, 6 in. — 

167 Draw pattern on machine, 7 in. — 

168 Draw pattern on machine, 8 in. — 

169 Draw pattern on machine, 9 in. — 

170 Draw pattern on machine, 10 in. — 

171 Draw pattern on machine, 11 in. — 

172 Draw pattern on machine, 12 in. — 

173 Return machine to ramming position — 

Everything depends on the accuracy of the sub-elemental 
operation times. Obviously unusual care must be made in 
the selection and arrangement of equipment, as well as in 
recording- conditions. Likewise, the operative that is being 
timed must be of the right capacity, and qualifications, both 
physical and mental. In this connection, take the average 
times of at least five different men or groups of men of the 
qualifications above described in the earlier part of these in- 
structions. 

All of the standard elemental sub-operations listed below 
should be timed at least twenty different times for each 
different condition and with each of the five average may 
be made. In some cases it will be desirable and practicable 
to take a great many more than twenty observations 
(under each varying condition), especially on short sub- 
operations. Where reference is made to taking twenty ob- 
servations, it does not mean a total of twenty where you 
are using five different men, but twenty observations for 
each of the five or more men. On this kind of work ac- 



144 STANDARD SUB-ELEMENTAL TIMES 

curacy is everything, for times once determined for a given 
condition, cannot be changed. As previously stated, they 
constitute a large percentage of future time determinations. 

13 — Standard Sub-Elemental Times for Bench and 
Squeezer Work 

In section 12 above will be found a long list of variables 
for floor work, on which standard times apply. A similar 
list of standard sub-elemental operations has also been 
worked up applicable to bench and squeezer work. There 
are about 31 of these elemental sub-operations for all of 
which standard times have been determined for various 
classes of work. 

The variables to be provided for in establishing these 
standard times have been brought down to a definite 
standard. They consist of the following: — 

Job Classes 

1 — Non-cored work 
2 — Cored work 

Pattern Equipment 
Single 
Gated 
Plated 

Methods 

Bench (All hand methods) 

Machine (Power and hand Squeezer) 

Flasks 

Snap and solid flasks — 15 different sizes by plane 
dimensions and 5 depths for each : — 75 combina- 
tions in all. 

The following will help to describe more fully the sub- 
divisions of the above job classes. It may be mentioned 
here that plated patterns come in the same "job class" as 



FREDERIC A. PARKHURST 1 45 

gated work. See Fig. 8, which illustrates a few of the 
many varieties of work which have been standardized. 

Job Class i Non-Cored Work 

i a. Plain — single pattern 

lb. Plain — gated pattern 

ic. Irregular — single pattern 

id. Irregular — gated pattern 

ie. Complicated — single pattern 

if. Complicated — gated pattern 

Job Class 2 Cored Work 

2a. Plain — single pattern 

2b. Plain — gated pattern 

2c. Irregular — single pattern 

2d. Irregular — gated pattern 

2e. Complicated — single pattern 

2f. Complicated — gated pattern 

In addition to the standard times which apply to both 
cored and non-cored work must be added core setting times 
for job class 2 work. Times have been established for core 
setting covering from i to 8 cores for a single pattern and 
from 2 to 42 cores per mold for gated or plated patterns. 

Based on the factors referred to in the last 3 preceding 
paragraphs, we have the following combinations for any 
of which it is possible to instantly determine the standard 
production data directly from the tables, viz. — 

Standard production all tabulated and indexed (as per 

table 2) 36325. 

Elemental operation times (bench) 900. 

Elemental operation times (bench plated) 900. 

Elemental operation times (machine) 900. 

Elemental operation times (machine plated) 900. 

Elemental operation times (core setting) 69. 

Standard times applying on the above and admitting of 

an almost unlimited combination 1440. 

Operations variable by both job class and mold sizes. . . . 900. 
Total tabulated combinations 42334. 



146 



STANDARD SUB-ELEMENTAL TIMES 



TABLE II 

A TYPICAL STANDARD PRODUCTION DATA TABLE 

» , JOB CLASS 2E BONUS CLASS 8 , r 



Number of Cores to Set Single Pattern 
1 2 3 4 S 6 7 



10x24 6 


1440 M 
P 
C 


168 

168 
2585S 


154 

154 
1723S 


142 

142 

2032S 


132 

132 
3020S 


122 

122 

3252S 


114 

114 
3229S 


107 

107 
3243 S 


101 

101 

3245S 


147 

294 

2330S 


145 

580 

2163S 


7 


1680 M 
P 
C 


159 

159 
2586S 


146 

146 
2731S 


135 

135 

2288S 


126 

126 

3234S 


117 

117 
2691S 


110 

110 

3241 S 


104 

104 

3246S 


98 

98 
3246S 


140 

280 
233 IS 


138 

552 
2526S 


8 


1920 M 
P 
C 


150 

150 

203 IS 


139 

139 

2730S 


129 

129 
2530S 


120 

120 

3224S 


113 

113 

3228S 


106 

106 

3239S 


100 

100 

3253S 


95 

95 
3259S 


133 

266 

2332S 


132 

528 

2541S 


9 


2160 M 
P 
C 


143 

143 

2534S 


133 

133 

2033 S 


123 

123 

253 IS 


116 

116 

3236S 


109 

109 

3238S 


102 

102 
3255S 


97 

97 
3261 S 


92 

92 

3257S 


127 

254 
3004S 


126 

504 

2540S 


10 


2400 M 
P 
C 


136 

136 
2529S 


127 

127 
2034S 


118 

118 

3230S 


111 

111 

3232S 


105 

105 

3242S 


99 

99 
3256S 


94 

94 

3258S 


89 

89 

3287S 


122 

244 
1701S 


121 

484 

3159S 


11x26 6 


1716 M 
P 
C 


158 

158 

2287S 


146 

146 

273 IS 


135 

135 

2288S 


125 

125 

3226S 


117 

117 
2691S 


110 

110 

3241S 


103 

103 

3240S 


98 

98 
3246S 


138 

276 

2528S 


136 

544 

2350S 


7 


2002 M 
P 
C 


148 

148 

2042S 


138 

138 
3225S 


128 

128 

3223 S 


119 

119 
3235S 


112 

112 

3237S 


105 

105 

3242S 


99 

99 
3256S 


94 

94 

3258S 


131 

262 

2377S 


129 

516 

2165S 


8 


2288 M 
P 
C 


140 

140 
2029S 


130 

130 
2590S 


121 

121 

3227S 


114 

114 
3229S 


107 

107 
3243S 


101 

101 
3245S 


95 

95 
3259S 


91 

91 
3264S 


124 

248 

2595S 


123 

492 

2166S 


9 


2574 M 
P 
C 


132 

132 

3020S 


124 

124 

2733S 


115 

115 
3231S 


108 

108 

3233S 


102 

102 

3255S 


97 

97 
3261S 


92 

92 
3257S 


87 

87 
3304S 


118 

238 
2693 S 


117 

468 

1724S 


10 


2860 M 
P 
C 


125 

125 
3226S 


118 

118 

3230S 


110 

110 

3241S 


104 

104 

3244S 


98 

98 
3246S 


93 

93 
3262S 


88 

88 
3260S 


84 

84 

3318S 


112 

224 

1704S 


111 

444 

1726S 


12x16 6 


1152 M 
P 
C 


180 

180 
2036S 


164 

164 

2038S 


150 

150 
2031 S 


139 

139 

2730S 


128 

128 
3223S 


120 

120 

3224S 


112 

112 

3237S 


105 

105 

3242S 


157 

314 

2096S 


155 

620 

2928S 


7 


1344 M 
P 
C 


171 

171 
2037S 


157 

157 
2039S 


144 

144 
2283S 


133 

133 
2033S 


124 

124 
2733S 


116 

116 
3236S 


109 

109 
3238S 


102 

102 
3255S 


151 

302 
2593 S 


149 

596 

1767S 


8 


1536 M 
P 
C 


163 

163 

2027S 


150 

150 

203 IS 


138 

138 

3225S 


129 

129 

2530S 


120 

120 

3224S 


H2 

112 

3237S 


105 

105 
3242S 


100 

100 

3253 S 


145 

290 

2167 S 


143 

572 
2226S 


9 


1728 M 
P 
C 


156 

156 

2692S 


144 

144 
2283 S 


133 

133 

2033S 


124 

124 

2733 S 


116 

116 
3236S 


109 

109 
3238S 


103 

103 
3240S 


97 

97 
3261 S 


139 

278 

2537S 


137 

548 
2164S 


10 


1920 M 
P 
C 


150 

150 
203 IS 


139 

139 
2730S 


128 

128 

3223 S 


120 

120 

3224S 


112 

112 

3237S 


106 

106 

3239S 


100 

100 

3253 S 


95 

95 
3259S 


134 

268 

2596S 


132 

528 

2541 S 



Though the above represents over 42,000 tabulated com- 
binations, it is possible to make up other combinations to 
meet almost any desired case. It often happens that some 
variable on a new job throws it out of the standardized tab- 
ular group. In such cases, all that it is necessary to do is 
to add or subtract certain sub-operation times from the 



FREDERIC A. PARKHURST 



147 



TABLE II— Continued 

A TYPICAL STANDARD PRODUCTION DATA TABLE 

JOB CLASS 2F BONUS CLASS 8 

Number of Patterns on Plate 

10 12 14 16 18 20 22 24 30 



36 



42 



143 

858 

2224S 


141 

1128 
1779S 


139 

1390 
25S2S 


135 

1620 
2084S 


133 

1862 
2316S 


130 

2080 
1814S 


127 

2286 
3012S 


125 

2500 
2716S 


123 

2706 
2130S 


120 

2880 
1884S 


116 

3480 
2123S 


113 

4068 
2726S 


110 

4620 
1933S 


136 

816 

1752S 


135 

1080 
1783S 


132 

1320 
2S04S 


129 

1548 
2149S 


127 

1778 
3010S 


124 

1984 
2632S 


122 

2196 

2445S 


120 

2400 
2214S 


118 

2596 
3274S 


116 

2784 
2186S 


111 

3330 
3126S 


108 

3888 
1893S 


106 

4452 
3284S 


130 

780 
1760S 


128 

1024 
2614S 


126 

1260 
1772S 


124 

1488 
2416S 


121 

1694 
3271S 


119 

1904 
2348S 


117 

2106 
2737 S 


115 

2300 
2569S 


113 

2486 
2720S 


111 

2664 
1832S 


107 

3210 
3297S 


104 

3744 
1869S 


103 

4326 
3300S 


124 

744 
2470S 


123 

984 

2158S 


121 

1210 
3267S 


118 

1416 

2241S 


116 

1624 
2946S 


114 

1824 
1791S 


112 

2016 
2263 S 


111 

2220 
1811S 


109 

2398 
3275S 


107 

2568 
2398S 


103 

3090 
3298S 


101 

3636 
1898S 


99 

4158 
3164S 


119 

714 

2699S 


118 

944 
2757S 


116 

1160 

2155S 


114 

1369 
1769S 


112 

1568 

2773 S 


110 

1760 

1822S 


108 

1944 
2621 S 


106 

2120 
2780S 


105 

2310 
2499S 


103 

2472 
2785S 


100 

3000 
2212S 


97 

3492 
1899S 


96 

4032 
2252S 


135 

810 

2092S 


133 

1064 
2324S 


131 

1310 
2370S 


128 

1536 
1798S 


125 

1750 
2711S 


123 

1968 

2142S 


120 

2160 
1812S 


118 

2360 
2779S 


116 

2552 
3276S 


114 

2736 
1831S 


110 

3300 
2210S 


107 

3852 
2395S 


105 

4410 
2306S 


128 

768 

1754S 


126 

1008 
2270S 


124 

1240 
2618S 


122 

1464 
2449S 


119 

1666 
2701 S 


117 

1872 
1790S 


115 

2070 
2566S 


113 

2260 
2717S 


111 

2442 
3295S 


109 

2616 
1835S 


106 

3180 
2495S 


103 

3708 
2810S 


101 

4242 
3282S 


121 

726 

3288S 


120 

960 

2271S 


118 

1180 
3290S 


116 

1392 
2196S 


114 

1596 

2318S 


112 

1792 
2628S 


110 

1980 
1816S 


108 

2160 
1812S 


106 

2332 
3303 S 


104 

2496 
1888S 


101 

3030 
3280S 


99 

3564 
1897S 


97 

4074 
3283S 


115 

690 

2549S 


114 

912 

1747S 


113 

1130 

2707S 


110 

1320 

2504S 


108 

1512 

2556S 


107 

1712 
2400S 


105 

1890 
2081 S 


103 

2060 
2781S 


102 

2244 
2900S 


100 

2400 
2214S 


97 

2910 
323 IS 


95 

3420 
1926S 


93 

3906 
3080S 


110 

660 
2508S 


109 

872 
17S1S 


108 

1080 
1783S 


106 

1272 
2505S 


104 

1456 
1802S 


102 

1632 
1796S 


101 

1818 
3311S 


99 

1980 
1816S 


98 

2156 
2104S 


96 

2304 
1838S 


93 

2790 
2932S 


91 

3276 
1849S 


90 

3780 
1894S 


153 

■918 

2372S 


150 

1200 
2221 S 


148 

1480 
1803S 


144 

1728 
1793S 


141 

1974 
2559S 


138 

2208 
2519S 


135 

2430 
2229S 


133 

2660 
2312S 


130 

2860 
2213S 


127 

3048 
3015S 


122 

3660 
2437S 


119 

4284 
2725S 


116 

4872 
2958S 


146 

876 

2272S 


145 

1160 
2155S 


142 

1420 
2086S 


139 

1668 
2558S 


136 

1904 
2348S 


133 

2128 
2191S 


130 

2340 
1809S 


128 

2560 
2258S 


125 

2750 
2719S 


123 

2952 
2126S 


118 

3540 
2235S 


115 

4140 
2514S 


113 

4746 
2729S 


141 

846 

2548S 


139 

1112 

2550S 


137 

1370 

21S2S 


133 

1596 
2318S 


131 

1834 
2366S 


128 

2048 
2634S 


125 

2250 
2714S 


123 

2460 
2134S 


121 

2662 
3249S 


119 

2856 
1855S 


114 

3420 
1926S 


111 

3996 
1892S 


109 

4578 
3281S 


135 

810 

2092S 


134 

1072 
2613S 


132 

1320 
2504S 


129 

1548 
2149S 


126 

1764 
2317S 


124 

1984 
2632S 


121 

2178 
3248S 


119 

2380 
2295S 


117 

2574 
2215S 


115 

2760 
2517S 


111 

3330 
3126S 


108 

3888 
1893S 


106 

4452 
32S4S 


131 

786 

2373 S 


129 

1032 

21S7S 


127 

1270 
3008S 


124 

1488 
2468S 


122 

1708 
2629S 


120 

1920 
1817S 


117 

2106 
2737S 


115 

2300 
2569S 


113 

2486 
2720S 


111 

2664 
1832S 


108 

3240 
1902S 


105 

3780 
1894S 


103 

4326 
330OS 



standard time sheets. Table II is a typical table and is an 
exact copy of one of the set of 90. 

An immense amount of detail work was necessary before 
the standardization of all the above variables and their pos- 
sible combinations was complete. It was necessary to take 
thousands of time studies. These studies had to apply to a 



I48 STANDARD SUB-ELEMENTAL TIMES 

great variety of patterns of all classes and for each of the 
above mentioned forms of equipment, method and flask 
sizes. The result of all this work has been gratifying - , how- 
ever. 

All of the standard data has now been tabulated with the 
result that 95 per cent of all bench and squeezer work done 
by any of the six foundries of the Aluminum Castings Co. 
can be put on bonus direct from these tables. This means 
definite and absolute standardization. Short run work can 
be put on bonus at once without the necessity for taking 
time studies on each pattern. 

By this method it is possible to apply scientific manage- 
ment methods to a short job which would ordinarily run 
out long before a satisfactory time study could be made. 
The importance of this one feature alone must not be under- 
estimated. As several of the Aluminum Castings Co. foun- 
dries do practically a jobbing business, the value of these 
tables can be readily appreciated. 

This standard data has even, more value in several other 
ways than the feature above mentioned. In the first place 
there is no guess work as to the most economical combina- 
tion of pattern equipment, number per mold, size of flask, 
method to be employed, etc. A glance at the tables tells 
instantly what is the best combinations to employ for each 
job to assure a maximum production and minimum cost. 

Yet another great value is that of having definite data on 
which to base estimates. This applies both to the routine 
work of estimating, as well as the solving of problems of 
this nature by the sales representatives. This is true of 
both the floor, bench and squeezer data. Combining these 
advantages and the ability (through accurate analytical 
costs) to check up past performances puts a firm employing 
these methods in position to practically predetermine costs. 

New equipment can be made to absolutely agree with the 
best standards and practice. There is no longer need to 
guess and try "rule of thumb" methods or "cut and dry" 
until we hit the right way, or the best combinations. It is 
impossible here to list all of the many advantages to be de- 



FREDERIC A. PARKHURST 1 49 

rived from this data. The results speak for themselves. 
We are rinding new uses and new value in this standardized 
data every day it is in use. 

All bench and squeezer jobs at both the Detroit and 
Cleveland plants have been put on bonus direct from these 
standard production data sheets for the last six months. We 
have yet to find a case where the men have been unable to 
reach the production asked for. Neither have the maxi- 
mum production figures been exceeded. The author claims 
that the standardization of foundry operations and practice 
here described marks an epoch in the history of foundry 
work and is in itself the vindication of scientific manage- 
ment in this virgin field. 

14 — Standard Miscellaneous Data 

The Time Study Foreman is responsible for the follow- 
ing standard data. This data must be kept up to date. The 
list given below is subject to revision and amplification to 
suit varying conditions and plants. 

Flask Data — Flasks are tools, hence come into the "T" 
class of symbols. Our flasks must be listed in a systematic 
manner in order of dimension ; commencing with the small- 
est "Ti, T2, T3, etc., new flasks take the next number. 
The following shows how this list should appear : 

Flask Record 

Inside Contents Weight 

Flask Pattern Quan- Dimensions Bars Weight cubic with sand 



lymbol 

STet wt. 
sand 


symbol tity L W D lbs. inches 

Flask Record — Continued 

Weight rammed Net wt. C-Cope 
full of sand of sand D-Drag 


this 
pattern 

Weight 
of board 



Handling Times of Sand and Equipment — The data we 
are accumulating on the weight of sand rammed "soft," 
"medium" and "hard" will allow us to determine an average 
weight per cubic inch or foot. The chief controlling factor 
in most of our work (exclusive of the standard elemental 
sub-operations) is the weight of sand to be shoveled and 
rammed, area and contour of flasks and the weight of the 



I50 STANDARD MISCELLANEOUS DATA 

cope and drag complete. To these shall be added the un- 
usual but necessary operations peculiar to certain jobs not 
covered by our standard production data. 

After we have standard times on the sub-operations we 
will then base all our calculations on our standard of "allow- 
able work in foot pounds per man." 

Core Work — Standard data for this work will be similar 
(but much simpler) to that above mentioned in the list of 
standard sub-elemental operations. The chief factors to de- 
termine (for each core box of each pattern) are listed in a 
manner similar to that shown above for molding- operations. 
This detail need not be repeated here. 

Tool and Equipment Data — Keep a complete record on 
each time study of each job of the tools and equipment in 
use. Do not lose sight of the fact that the time study must 
include all information (or references) pertaining to each 
job or operation. All material and the quantities used per 
unit of work must be fully specified as well as the tools and 
equipment. This information is absolutely essential before 
the instruction card or bonus chart can be issued. 

Files — File all time studies, in a vertical loose-leaf file, 
arranged numerically by the "time study number." Keep 
a 3x5-inch card index to the time study file, arranged by 
classes of work and in alphabetical and numerical order of 
piece symbol or other identifying mark. This card shows 
the complete routing for each piece as well as the bonus 
maximum and bonus chart number for each operation. 

References — A general treatment of the subject of time 
study work will be found in "Applied Methods of Scientific 
Management," copy of which is on file in the planning 
room, and same is understood to be a part of these instruc- 
tions, particularly matter on pages 147 to 166 inclusive. 

Responsibility for Jobs on Bonus — After a satisfactory 
time study has been made and the time for a job determined 
(and the bonus list issued) the real work begins. It is up 
to the Time Study Foreman and his assistants to follow 
each new bonus job until it is going satisfactorily, both as 
to method, quantity and quality. They must not relax their 



FREDERIC A. PARKHURST 151 

vigilance until such time as the job reaches the maximum 
production called for by the Differential Bonus Chart. 
When this production has been reached and held for a time 
(and then only) the men. themselves will see that it does not 
fall off through any fault of theirs. 

15 — General Instructions to Time Study Men 

The time study men must not forget that they are in the 
position of functional bosses and must deport themselves 
accordingly. In developing a position of this kind, care 
must be taken in setting an example to the men and by in- 
dustry and ability try to raise the general standard of the 
shop. 

In keeping your records, be systematic and study the 
symbol system as it is developed so that you will fully ap- 
preciate what is involved in the different series of symbols 
which will be put in use from time to time. The use of 
symbols means a large saving of time by greatly reducing 
the work, besides simplifying records. 

In connection with your regular time study work you 
will be expected to report to the proper parties all matters 
pertaining to the violation of the shop rules. These should 
be carefully studied so that the time study men will be thor- 
oughly familiar with them. Time study men can also be 
of material assistance to the shop employes by instructing 
them regarding the details specified in the rules with which 
they may be unfamiliar, or do not understand. 



LECTURE XXVI 

time study and bonus (continued) 
16. Parkhurst's Differential Bonus. 

The above subject will discuss the author's differential bonus in 
somewhat more detail than is covered in the text, and previously dis- 
cussed in Lecture 23. 

The following is reprinted complete from the author's "Scientific 
Management in the Foundry," section 16. 

It is not the intention here to enter into a discussion, 
academic or otherwise, of the advantages of the various 
forms of remunerating labor. Based on the writer's experi- 
ence with day work, piece work, premium and bonus, he 
has during the last ten years developed a differential bonus 
system. The differential system, as described below, has 
been flexible enough to be readily adaptable to any require- 
ments put upon it. Using the same fundamental principle 
throughout, the application of the standard differential 
bonus charts is universal. 

The author's experience has been that with properly 
standardized hourly rates for various grades of labor in 
each trade involved, the addition of a generous bonus for 
high production will give greater results than any other 
method. As he has had occasion to remark before, we pay 
for the employe's time, we arrange his equipment and sup- 
ply a more or less complex organization to control that 
equipment and the materials in process. By positive means 
we determine the maximum production that the average 
good man can turn out per day and we certainly have the 
privilege of utilizing the time we pay for to the best advan- 
tage and toward this end. Obviously, however, it is not fair 
to the worker to prevent his participating in the saving that 
is realized. We do this by means of increased wages (in the 
form of bonus) in proportion to the additional work he 
turns out. 

152 



FREDERIC A. PARKHURST 1 53 

If the employe is assured of a day's pay his mental atti- 
tude from the very start is going to be more favorable than 
if his pay depends entirely on what he turns out for a day's 
work, as under the piece work system. In a piece work 
shop the men are often put on strange jobs and though they 
work hard all day they are not able to earn more than one- 
third or one-half of a regular day's pay. This may go on 
for several days before they can make their average piece 
work day's pay. This obviously is unfair. 

The premium system, though it carries a specific day rat- 
ing, is not efficient in that the average methods used leave 
too much to the judgment and will of the individual em- 
ploye. In other words, you can't get maximum production 
if you say to a man that his rate will be $2.50 a day and 
that he gets the equivalent to half (or some other propor- 
tion) of what he saves, over and above, say ten pieces per 
day. The tendency of this method is for everyone from 
the management down to tend to approximately what the 
man ought to do, and if this approximation is wrong it 
limits production, because he will not make all that he pos- 
sibly can. The same thing applies to piece work where 
rates are incorrectly set. 

By the adoption of standard hourly rates and differential 
bonus for different classes of work, combined with a proper 
organization, including an especially strict inspection serv- 
ice, you can much better control your labor and product 
than you can under the average piece work system. 

Combine with the above methods accurate information 
as to exactly what is involved in each job, how long each 
job should take based on stop watch observations; add to 
these an openly advertised policy that under no circum- 
stances will you reduce a rate once set. Table 4 in section 
18 indicates what the result will be. 

To develop and standardize the differential bonus, as used 
by the author, he decided to provide in standard charts for 
fifteen different bonus classes. This classification applies to 
the job and not to the man. In other words, jobs are classi- 
fied as belonging in bonus class 1, 3 or 8, as the case may 



154 PARKHURST DIFFERENTIAL BONUS 

be. Each bonus class number is equivalent to 25c per day 
maximum bonus for 100 per cent efficiency. Therefore, a 
job rated as belonging under bonus class 5 would pay $1.25 
maximum bonus for 100 per cent efficiency. 

The differential is figured on a basis of 10 per cent of the 
maximum bonus for 50 per cent production and 100 per 
cent bonus for 100 per cent production. It might be 
further explained here that the bonus jobs are seldom 
started as low as 50 per cent of the calculated maximum 
of production. More generally in a new shop the bonus is 
started at 60 or 70 per cent, depending on the local shop 
conditions. 

Fig. 9 shows a standard differential bonus chart covering 
two charts, namely 100 and 101 units per day. The letters 
A, B, C and D, representing 50, 60, 70 and 80 per cent pro- 
duction respectively. The letter ^ represents standard pro- 
duction or 100 per cent efficiency. In Fig. 9 referred to, 
chart 100 was illustrated, so as to more readily explain the 
percentage basis used at the different stages of a plant's 
efficiency. 

To further explain, it should be noted that local plant 
conditions, the class of help and other variables govern to a 
great extent the progress that can be made particularly. 
This is particularly true of the early stages of reorganiza- 
tion work. During these early stages, it is necessary to con> 
mence the bonus sometimes as low as 60 and sometimes as 
low as 50 per cent of the maximum bonus production. This 
statement can be more readily appreciated when one stops to 
consider that it is not unusual to ask for five or six times 
the production per day under bonus that has been the ordi- 
nary practice of the shop under day work. If we start 
bonus (even though it is a small amount) at 50 per cent or 
60 per cent of this maximum, we put the bonus nearer the 
reach of the employe. This tends to encourage him to make 
a little effort to demonstrate for himself whether bonus can 
be made or not. Of course, at this stage of his work he has 
the help of the Time Study Foreman to see that he does not 
waste time in false moves. As time goes on the average 



FREDERIC A. PARKHURST 155 

efficiency of the shop becomes higher and the starting point 
for new jobs can be raised to 70 per cent and later to 80 
per cent of the calculated maximum. In all cases the bonus 
at given percentages is the same on any chart, whether it 
starts at 60 per cent or higher. 

At the Detroit plant of the Aluminum Castings Co. all 
bonus jobs have been figured to commence at 80 per cent 
of the maximum bonus production. This 80 per cent factor 
was established Sept. 1, 19 13. We have yet to find a case 
where the man did not earn bonus, nor have we found any 
case where the maximum bonus was appreciably exceeded. 

It should be understood thatthe figure of 80 per cent above 
mentioned, means the point at which the bonus commences. 
On all jobs it is expected that the average workman will 
reach 90 per cent to 100 per cent of the maximum produc- 
tion. The exceptional man will go to 100 per cent and be- 
yond. 

This exceptional man with the ability to exceed what the 
average good worker can do is perfectly welcome to the 
extra remunerations that he gets by exceeding the 100 per 
cent mark. It should be noted that though the bonus charts 
are figured to 100 per cent production, if a man should ex- 
ceed this amount by 5 or 10 per cent the differential is ex- 
tended down to the figure which he actually realizes. In 
other words, there is no limit. Fig. 10 illustrates a typical 
bonus chart form FAP 117. At the time this chart was 
issued, all bonus commenced at 70 per cent of the maximum. 

The success of any form of management lies in the con- 
fidence which the management is enabled to instill into the 
personnel. Subterfuge and excuses for changing rates must 
be absolutely avoided. The writer has always made it a point 
never to lower a bonus rate once established. This policy is 
openly published in the shop rules with concerns he has been 
identified with. He owes the success of his methods in a 
great measure to the fact that the personal factor has been 
of paramount consideration with him and all of those who 
come in contact with him and his methods know that prices 
will not be lowered, providing of course the equipment and 



156 



PARKHURST DIFFERENTIAL BONUS 



Standard Differential 
Bonus Chart. 



Form FAP201 



Frederick A. Parkhurst, M. E. 
Organizing Engineer. 



STANDARD DIFFERENTIAL BONUS CHARTS 100 AND 101 
1 Sheets, Sheet 1 



55 



-Bonus P 


roduction in— 


— , (Tr 


le decimal 


over the 


bonus cl 


ass figures ; 


i 
are 


Units 


per day for 


1 


;he differential or increment 


of change.) 




Chart. 


Chart. 


.0045 


.009 


.0135 


.018 


.0225 


.027 


100 


101 


1 


2 


3 


4 


5 


6 


SO 


51 


.025 


.050 


.075 


.100 


.125 


.150 


51 


52 


.030 


.059 


.089 


.118 


.148 


.177 


52 


53 


.034 


.068 


.102 


.136 


.170 


.204 


53 


54 


.039 


.077 


.116 


.154 


.193 


.231 


54 


55 


.043 


.086 


.129 


.172 


.215 


.258 


55 


56 


.048 


.095 


.143 


.190 


.238 


.285 


56 


57 


.052 


.104 


.156 


.208 


.260 


.312 


57 


58 


.057 


.113 


.170 


.226 


.283 


.339 


58 


59 


.061 


.122 


.183 


.244 


.305 


.366 


59 


60 


.066 


.131 


.197 


.262 


.328 


.393 


60 


61 


.070 


.140 


.210 


.280 


.350 


.420 


61 


62 


.075 


.149 


.224 


.298 


.373 


.447 


62 


63 


.079 


.158 


.237 


.316 


.395 


.474 


63 


64 


.084 


.167 


.251 


.334 


.418 


.501 


64 


65 


.088 


.176 


.264 


.352 


.440 


.528 


65 


66 


.093 


.185 


.278 


.370 


.463 


.555 


66 


67 


.097 


.194 


.291 


.388 


.485 


.582 


67 


68 


.102 


.203 


.305 


.406 


.508 


.609 


68 


69 


.106 


.212 


.318 


.424 


.530 


.636 


69 


70 


.111 


.221 


.332 


.442 


.553 


.663 


70 


71 


.115 


.230 


.345 


.460 


.575 


.690 


71 


72 


.120 


.239 


.359 


.478 


.598 


.717 


72 


73 


.124 


.248 


.372 


.496 


.620 


.744 


73 


74 


.129 


.257 


.386 


.514 


.643 


.771 


74 


75 


.133 


.266 


.399 


.532 


.665 


.798 


75 


76 


.138 


.275 


.413 


.550 


.688 


.825 


76 


77 


.142 


.284 


.426 


.568 


.710 


.852 


77 


78 


.147 


.293 


.440 


.586 


.733 


.879 


78 


79 


.151 


.302 


.453 


.604 


.755 


.906 


79 


80 


.156 


.311 


.467 


.622 


.778 


.933 


80 


81 


.160 


.320 


.4S0 


.640 


.800 


.960 


81 


82 


.165 


.329 


.494 


.658 


.823 


.987 


82 


83 


.169 


.338 


.507 


.676 


.845 


1.014 


83 


84 


.174 


.347 


.521 


.694 


.868 


1.041 


84 


85 


.178 


.356 


.534 


.712 


.890 


1.068 


85 


86 


.183 


.365 


.548 


.730 


.913 


1.095 


86 


87 


.187 


.374 


.561 


.748 


.935 


1.122 


87 


88 


.192 


.383 


.575 


.766 


.958 


1.149 


88 


89 


.196 


.392 


.588 


.784 


.980 


1.176 


89 


90 


.201 


.401 


.602 


.802 


1.003 


1.203 


90 


91 


.205 


.410 


.615 


.820 


1.025 


1.230 


91 


92 


.210 


.419 


.629 


.838 


1.048 


1.257 


92 


93 


.214 


.428 


.642 


.856 


1.070 


1.284 


93 


94 


.219 


.437 


.656 


.874 


1.093 


1.311 


94 


95 


.223 


.446 


.669 


.892 


1.115 


1.338 


95 


96 


.228 


.455 


.683 


.910 


1.138 


1.365 


96 


97 


.232 


.464 


.696 


.928 


1.160 


1.392 


97 


98 


.237 


.473 


.710 


.946 


1.183 


1.419 


98 


99 


.241 


.482 


.723 


.964 


1.205 


1.446 


99 


100 


.246 


.491 


.737 


.982 


1.228 


1.473 



100 



101 



.250 



.500 



.750 



1.000 



1.250 



1.500 



FIGURE 9.— PARKHURST'S STANDARD DIFFERENTIAL BONUS CHART 
OF A SET OF 1,000) FROM WHICH THE FIGURES FOR THE INDIVIDUAL 
BONUS CHARTS SHOWN IN FIGURE 10, SEE PARAGRAPH 241. 



FREDERIC A. PARKHURST 



157 



NOTE. — S = Standard production for specific conditions, as defined by the 
instruction card for each job and based on accurate stop watch observations. 
A, B, C or D represent quantity at which bonus is to commence; once deter- 
mined for a job this starting point is never changed for that job. Opposite 
the quantity per day will be found in each column (Bonus Class) the bonus 
per day in dollars and cents for that class. 









a\j 


Continued 


:vco • 








.0315 


.036 


.0405 


.045 


.0495 


.054 


.0585 


.063 


.0675 


7 


8 


9 


10 


11 


12 


13 


14 


15 


.175 


.200 


.225 


.250 


.275 


.300 


.325 


.350 


.375 


.207 


.236 


.266 


.295 


.325 


.354 


.384 


.413 


.443 


.238 


.272 


.306 


.340 


.374 


.408 


.442 


.476 


.510 


.270 


.308 


.347 


'.385 


.424 


.462 


.501 


.539 


.578 


.301 


.344 


.387 


.430 


.473 


.516 


.559 


.602 


.645 


.333 


.380 


.428 


.475 


.523 


.570 


.618 


.665 


.713 


.364 


.416 


.468 


.520 


.572 


.624 


.676 


.728 


.780 


.396 


.452 


.509 


.565 


.622 


.678 


.735 


.791 


.848 


.427 


.488 


.549 


.610 


.671 


.732 


.793 


.854 


.915 


.459 


.524 


.590 


.655 


.721 


.786 


.852 


.917 


.983 


.490 


.560 


.630 


.700 


.770 


.840 


.910 


.980 


1.050 


.522 




596 


.671 


.745 


.820 


.894 


.969 


1.043 


1.118 


.553 




632 


.711 


.790 


.869 


.948 


1.027 


1.106 


1.185 


.585 




668 


.752 


.835 


.919 


1.002 


1.086 


1.169 


1.253 


.616 




704 


.792 


.880 


.968 


1.056 


1.144 


1.232 


1.32G 


.648 




740 


.833 


.925 


1.018 


1.110 


1.203 


1.295 


1.388 


.679 




776 


.873 


.970 


1.067 


1.164 


1.261 


1.358 


1,455 


.711 




812 


.914 


1.015 


1.117 


1.218 


1.320 


1.421 


1.523 


.742 




848 


.954 


1.060 


1.166 


1.272 


1.378 


1.484 


1.500 


.774 




884 


.995 


1.105 


1.216 


1.326 


1.437 


1.547 


1.658 


.805 


.920 


1.035 


1.150 


1.265 


1.380 


1.495 


1.610 


1.725 


.837 


.956 


1.076 


1.195 


1.315 


1.434 


1.554 


. 1.673 


1.793 


.868 


.992 


1.116 


1.240 


1.364 


1.488 


1.612 


1.736 


1.860 


.900 


1.028 


1.157 


1.285 


1.414 


1.542 


1.671 


1.799 


1.928 


.931 


1.064 


1.197 


1.330 


1.463 


1.596 


1.729 


1.862 


1.995 


.963 


1.100 


1.238 


1.375 


1.513 


1.650 


1.788 


1.925 


2.063 


.994 


1.136 


1.278 


1.420 


1.562 


1.704 


1.846 


1.988 


2.130 


1.026 


1.172 


1.319 


1.465 


1.612 


1.758 


1.905 


2.051 


2.198 


1.057 


1.208 


1.359 


1.510 


1.661 


1.812 


1.963 


2.114 


2.265 


1.089 


1.244 


1.400 


1.555 


1.711 


1.866 


2.022 


2.177 


2.333 


1.120 


1.280 


1.440 


1.600 


1.760 


1.920 


2.080 


2.240 


2.400 


1.152 


1.316 


1.481 


1.645 


1.810 


1.974 


2.139 


2.303 


2.468 


1.183 


1.352 


1.521 


1.690 


1.859 


2.028 


2.197 


2.366 


2.535 


1.215 


1.388 


1.562 


1.735 


1.909 


2.082 


2.256 


2.429 


2.603 


1.246 


1.424 


1.602 


1.780 


1.958 


2.136 


2.314 


2.492 


2.670 


1.278 


1.460 


1.643 


1.825 


2.008 


2.190 


2.373 


2.555 


2.738 


1.309 


1.496 


1.683 


1.870 


2.057 


2.244 


2.431 


2.618 


2.805 


1.341 


1.532 


1.724 


1.915 


2.107 


2.298 


2.490 


2.681 


2.873 


1.372 


1.568 


1.764 


1.960 


2.156 


2.352 


2.548 


2.744 


2.940 


1.404 


1.604 


1.805 


2.005 


2.206 


2.406 


2.607 


2.807 


3.008 


1.435 


1.640 


1.845 


2.050 


2.255 


2.460 


2.665 


2.870 


3.075 


1.467 


1.676 


1.886 


2.095 


2.305 


2.514 


2.724 


2.933 


3.143 


1.498 


1.712 


1.926 


2.140 


2.354 


2.568 


2.782 


2.996 


3.210 


1.530 


1.748 


1.967 


2.185 


2.404 


2.622 


2.481 


3.059 


3.278 


1.561 


1.784 


2.007 


2.230 


2.453 


2.676 


2.899 


3.122 


3.345 


1.593 


1.820 


2.048 


2.275 


2.503 


2.730 


2.958 


3.185 


3.413 


1.624 


1.856 


2.088 


2.320 


2.552 


2.784 


3.016 


3.248 


3.480 


1.656 


1.892 


2.129 


2.365 


2.602 


2.838 


3.075 


3.311 


3.548 


1.687 


1.928 


2.169 


2.410 


2.651 


2.892 


3.133 


3.374 


3.615 


1.719 


1 


964 


2.210 


2.455 


2.701 


2.946 


3.192 


3.437 


3.683 



1.750 



2.000 



2.250 



2.500 



2.750 



3.000 



3.250 



3.500 



3.750 



FOR 100 AND 101 UNITS PER DAY. THIS IS A MASTER TABLE (ONE 
BONUS CHARTS MAY BE TAKEN WHEN MAKING THE INDIVIDUAL 



I58 PARKHURST DIFFERENTIAL BONUS 

method remains unchanged. Furthermore, he uses no "ex- 
cursion rates." A job once set is fixed forever. 

In order not to leave a wrong impression regarding the 
closing sentence of the preceding paragraph, a word of ex- 
planation is desirable. We are continually being confronted 
with slight changes in pattern equipment or methods that 
theoretically and fairly would even call for the revision of 
the bonus prices. Where this change of equipment does not 
make any material difference, say only 5 or 10 per cent, we 
in the majority of cases let the original bonus chart stand. 
We are very careful not to take advantage of any slight 
alteration of equipment to reduce a price. We are also 
careful to let the man realize that the entire scheme of man- 
agement from start to finish is one that contemplates fair 
treatment to him. 

The writer can cite cases of where the head man of a 
molding gang has asked for an additional laborer to dump 
out, stating if this man was supplied he could raise his day's 
production from 70 to jy molds. This was done on one 
particular job and the job ran for weeks at the average of 
over 76.2 good castings per day. The production of 76.2 
castings, referred to, under bonus represents an increase of 
103 per cent over the old piece work production, which 
averages 37.5 castings per day. This same man asked to 
be told a day before the pattern was to go out. of the sand so 
that he and his gang could put up a record that no other 
gang could touch. It is spirit of this kind which spells co- 
operation and harmony and gives the greatest results under 
any form of management. 

Reference to Table IV in section 18 will give an idea 
of the majority of foundry operations covered by the differ- 
ential bonus being described. These same principles have 
been applied, however, to miscellaneous work, such as re- 
moving large quantities of dirt, in one instance a pile con- 
taining 2,700 cubic yards. Reconstruction w T ork has also 
been handled on the same basis of remuneration. In other 
words, the entire scheme of bonus contemplates the applica- 
tion of this method of remuneration to practically every- 
one within the organization. 



FREDERIC A. PARKHURST 1 59 

Bonus Chart. Form FAP117 The Aluminum Castings Co. 

BONUS CHART 138—1 SHEET, SHEET 1 

Instruction No Date, March 8, 1913 

NOTE — The following prices will be paid as Bonus in addition to hourly 
wages based on Good Pieces which pass in after this specific operation, except 
that Defective not due to work specified on this Chart will not be deducted in 
paying Bonus. 

These Bonus Prices will not be lowered no matter how long the job may 
run with this pattern, core boxes, equipment and by the method and design 
specified in the instruction referred to and with the number of operatives 
mentioned below. 

OPERATION— Moldin g. 

SYMBOL— AA-3576. 

CUSTOMER— The Studebaker Corporation. 

EQUIPMENT — Drag on Power rollover machine; cope on horses ram up 13 
flat chills in cope; also tuck bars, ram and step off. 

OPERATIVES AND CLASS NO.-l Molder, Class 7; 2 Helpers, Class 5. 



Good 


Bonus, 


Bonus, 


Good 


Bonus, 


Bonus, 


Castings. 


Class 5. 


Class 7. 


Castings. 


Class 5. 


Class 7. 


140 


.575 


.805 


171 


.924 


1.293 


141 


.586 


.821 


172 


.935 


1.309 


142 


.598 


.837 


173 


.946 


1.325 


143 


.609 


.852 


174 


.958 


1.34 


144 


.62 


.868 


175 


.969 


1.356 


145 


.631 


.884 


176 


.98 


1.372 


146 


.634 


.90 


177 


.99 


1.388 


147 


.654 


.915 


178 


1.003 


1.404 


148 


.665 


.931 


179 


1.014 


1.419 


149 


.676 


.947 


180 


1.025 


1.435 


150 


.688 


.963 


181 


1.036 


1.451 


151 


.699 


.978 


182 


1.048 


1.467 


152 


.71 


.994 


183 


1.059 


1.482 


153 


.721 


1.01 


184 


1.07 


1.499 


154 


.733 


1.026 


185 


1.081 


1.514 


155 


.744 


1.041 


186 


1.093 


1.53 


156 


.755 


1.057 


. 187 


1.104 


1.545 


157 


.766 


1.073 


188 


1.115 


1.561 


158 


.778 


1.089 


189 • 


1.126 


1.577 


159 


.789 


1.104 


190 


1.138 


1.593 


160 


.80 


1.12 


191 


1.149 


1.608 


161 


.811 


1.136 


192 


1.16 


1.624 


162 


.823 


1.152 


193 


1.171 


1.64 


163 


.834 


1.167 


194 


1.183 


1.656 


164 


.845 


1.183 


195 


1.194 


1.671 


165 


.856 


1.199 


196 


1.205 


1.687 


166 


.868 


1.215 


197 


1.216 


1.703 


167 


.879 


1.23 


198 


1.228 


1.719 


168 


.89 


1.246 


199 


1.239 


1.734 


169 


.901 


1.262 


200 


1.25 


1.75 


170 


.913 


1.278 









FIGURE 10.— BONUS CHARTS ISSUED TO EACH EMPLOYE (OR GROUP 
OF EMPLOYES). THE FIGURES ARE TAKEN FROM THE STANDARD 
DIFFERENTIAL BONUS CHARTS ILLUSTRATED IN FIG. 9, SEE PARA- 
GRAPH 245. 

Another application may be described in reference to a 
bonus scheme, which has been worked out for the remunera- 
tion of the inspection force. This is termed "quality 
bonus." Figures have been determined representing- what 
the ioo per cent mark for quality would be for each of the 
following factors : 

A Foundry Defective Castings. 

B Total Cost of Repairing, Soldering and Welding. 

C Percentage of Defective Castings returned from customers. 



l6o PARKHURST DIFFERENTIAL BONUS 

The figures which have been determined for each of the 
above items A, B and C, represent an efficiency mark ap- 
plicable to quality which nets all of the inspectors a maxi- 
mum bonus. The differential of this bonus is figured in 
exactly the same way as described above for other work. 
If the above marks are realized to the extent of 80 per cent 
of the maximum, the bonus commences and by the usual 
differential grades along to the 100 per cent mark. 

Another interesting application of this differential bonus 
method of payment, is the application of this principle to 
brass meltng in the coke furnaces in the Detroit plant of 
the Aluminum Castings Co. This same method will be ap- 
plied to the brass melting in the Cleveland plant by the end 
of the year. 

The following is a copy of the differential bonus chart 
3574D covering the details of this brass melting bonus. 
The description of the way this is handled, as shown by the 
chart referred to, is self-explanatory. 

Bonus Chart No. 3574D 
Differential Bonus for Melting Lynux Metal 

The following prices, based on man-furnace hours per heat, will 
be paid in addition to hourly wages for time consumed on the job by 
the Lynux melting gang, based on a 12-hour furnace day. 

The metal will be sent to the furnaces in weighed charges. It is 
to be melted and delivered to skimming box (ready for the pouring 
gang) at a pouring temperature high enough for the class of work 
for which it is intended. 

Furnaces are to be operated on natural draft, using coke as fuel, 
which coke will be delivered into bins back of furnaces, but is to be 
broken by the melting gang. A half hour will be allowed for building 
a fire. Power hoists have been provided for lifting the pots from 
furnaces. 

The different kinds of Lynux are to be graded by the foreman ac- 
cording to time required for melting and a chart will be issued showing 
the "equivalent in standard heats" for any number of pounds of the 
various grades. The standard heat is regarded as grade 6 — 240 pounds 
in two hours. 

The computation for "man-furnace hours per heat" is to be made 
as follows: 

(1) Compute from the daily job time cards the total man-hours 
spent by the melting gang. 

(2) The sum of the hours which each individual furnace runs 
will give the total furnace hours. 



FREDERIC A. PARKHURST l6l 



(3) For each heat melted compute from the table its "equivalent 
in standard heats" and the sum of these gives the total standard heats. 

(4) {2>Yz total man-hours) -f total furnace hours=total man-fur- 
nace hours. 

(5) Total man- furnace hours=Man-furnace hours per heat. 

Total standard heats. 

Delays caused by conditions beyond the control of the melting gang 
will be allowed for. These prices will not be changed as long as present 
conditions of operation remain the same. 

Differential 

Bonus Class 5—0.01406; Bonus Class 6—0.01687 

Bonus based on man-furnace hours per standard heat as computed 
from record of daily charges and heat equivalent table. (See Table 
III.) 



Man 


Melters' 


Each 


Man 






furnace 


bonus 


Helper bonus 


furnace 






5. per heat. 


Class 6. 


Class 5. 


hrs. per heat. 


Class 6. 


Class 5. 


5.00 


$1,162 


$ .969 


4.50 


$1,331 


$1,109 


4.95 


1.179 


.983 


4.45 


1.348 


1.123 


4.90 


1.196 


.997 


4.40 


1.365 


1.137 


4.85 


1.213 


1.011 


4.35 


1.382 


1.151 


4.80 


1.230 


1.025 


4.30 


1.398 


1.165 


4.75 


1.247 


1.039 


4.25 


1.415 


1.179 


4.70 


1.263 


1.053 


4.20 


1.432 


1.194 


4.65 


1.280 


1.067 


4.15 


1.449 


1.208 


4.60 


1.297 


1.081 


4.10 


1.466 


1.222 


4.55 


1.314 


1.095 


4.05 


1.483 


1.236 



4.00 1.500 1.250 

In computing the bonus each day reference has to be 
made to the Brass Furnace Heat Equivalent Table 2 here- 
with. The Daily Metal Room Report gives a record of 
each different alloy number. Each alloy number belongs 
in one of the metal groups 5 to 10 inclusive. The sum of 
the equivalent heat figures for each group melted each day 
divided into the total man furnace hours for that day gives 
the man furnace hours per heat. 

The combination of man hours and man furnace hours 
enables us to maintain a minimum of labor and assures the 
use of a minimum number of furnaces per day. Other- 
wise, additional furnaces might be fired up to gQt a few 
extra heats at an excessive cost for fuel. The method has 
been in vogue for several months and has worked out very 
successfully. Figures in the heat equivalent table are based 
on the results of actual time studies for the various groups 
of metal and for varying charges. These figures check out 



1 62 



PARKHURST DIFFERENTIAL BONUS 



TABLE III 

BRASS FURNACE "HEAT" EQUIVALENT TABLE 

(Used in connection with Differential Bonus Chart No. 3574D. 
Lynux Melting Practice) 

1. Standard Heat — 240 lb. charge, Group 6 in 2 hours. 



Pounds 



per 




charge. 


5 


5 


.30 


10 


.42 


15 


.48 


20 


.54 


25 


.552 


30 


.565 


35 


.582 


40 


.600 


45 


.615 


50 


.630 


55 


.645 


60 


.660 


65 


.675 


70 


.690 


75 


.705 


80 


.720 


85 


.735 


90 


.750 


95 


.765 


100 


.780 


105 


.795 


110 


.810 


115 


.825 


120 


.840 


125 


.855 


130 


.870 


135 


.885 


140 


.900 


145 


.915 


150 


.930 


155 


.945 


160 


.960 


165 


.975 


170 


.990 


175 


1.005 


180 


1.020 


185 


1.035 


190 


1.050 


195 


1.065 


200 


1.080 


205 


1.095 


210 


1.110 


215 


1.125 


220 


1.140 


225 


1.155 


230 


1.170 


235 


1.185 


240 


1.200 





—Standard Heat 


Equivalents— 






Metal Group 




6 


7 


8 


9 


.25 


.214 


.082 


.052 


.35 


.300 


.100 


.056 


.40 


.343 


.117 


.059 


.45 


.386 


.133 


.062 


.46 


.394 


.150 


.066 


.47 


.403 


.153 


.069 


.485 


.416 


.156 


.073 


.500 


.428 


.159 


.076 


.512 


.438 


.162 


.079 


.525 


.450 


.166 


.082 


.537 


.460 


.169 


.085 


.550 


.472 


.173 


.089 


.562 


.482 


.176 


.092 


.575 


.493 


.180 


.096 


.587 


.503 


.183 


.099 


.600 


.514 


.186 


.103 


.612 


.525 


.190 


.106 


.625 


.536 


.193 


.110 


.637 


.546 


.197 


.113 


.650 


.557 


.200 


.117 


.662 


.568 


.203 


.120 


.675 


.578 


.206 


.124 


.687 


.589 


.210 


.127 


.700 


.600 


.213 


.130 


.712 


.611 


.216 


.133 


.725 


.622 


.219 


.137 


.737 


.632 


.223 


.140 


.750 


.643 


.227 


.143 


.762 


.654 


.230 


.147 


.775 


.664 


.234 


.150 


.787 


.675 


.237 


.153 


.800 


.686 


.240 


.157 


.812 


.696 


.244 


.160 


..825 


.707 


.247 


.163 


.837 


.718 


.250 


.166 


.850 


.728 


.253 


.170 


.862 


.739 


.256 


.173 


.875 


.750 


.260 


.176 


.887 


.760 


.263 


.180 


.900 


.771 


.266 


.183 


.912 


.782 


.269 


.186 


.925 


.792 


.272 


.190 


.937 


.802 


.276 


.193 


.950 


.813 


.279 


.196 


.962 


.824 


.282 


.200 


.975 


.834 


.285 


.203 


.987 


.845 


.288 


.206 


1.000 


.857 


.291 


.210 



10 
.129 
.133 
.137 
.141 
.145 
.149 
.153 
.157 
.162 
.166 
.170 
.174 
.178 
.183 
.187 
.191 
.195 
.199 
.204 
.208 
.212 
.216 
.220 
.225 
.229 
.233 
.237 
.241 
.246 
.250 
.254 
.258 
.262 
.267 
.271 
.275 
.279 
.283 
.288 
.292 
.296 
.300 
.304 
.309 
.313 
.317 
.321 
.325 



very close in practice and the first day the furnace gang 
worked on this schedule they earned bonus. 

Fig. 1 1 shows a very interesting large crank case job run 
on the floor under bonus early in 19 12. The record of this 



FREDERIC A. PARKHURST 163 

job during 38 days' run — four duplicate sets of equipment, 
is as follows : 



6 


a 


be 

V 


u 



"3 


s 

u 

> 


6 


1 * 


bo 


V 

bo 

'3 


be 
£ . 

'Is C 






en 

h 

O.T3 


(U 


£ 


H 


c 


£ 


< 


§ 


Q 


flw 


Eh 





1 


1,039 


3,395.0 





37.72 


27.55 


28.6 


$23.27 


$ 9.121 


$33,391 


$1,175 


2* 


1,140 


3,268.5 





36.31 


31.40 


32.2 


25.64 


12.926 


38.566 


1.228 


3 


1,042 


3,398.5 





37.64 


27.70 


29.1 


23.06 


9.607 


32.667 


1.180 


S 


984 


3,310.0 





36.77 


26.75 


28.3 


24.06 


8.832 


32.882 


1.230 




Average 


:s of four 


patterns 


28.35 


29.55 


$24,005 


$10,121 


$34,126 


$1,203 



*Gang on pattern No. 2 was a picked gang considered the fastest 
and best workers in the shop, always worked together and received 
extra high wages owing to their efficiency. 

Old average good production under combination of day wages and 
premium — 15.15 cases. 

Old average good production cost under combination of day wages 
and premium — $1,196 per case. 

Bonus average production increase, 87.2 per cent per case. 

Bonus average cost increased $0,007 per case. 

This is an example of an occasional case where the direct labor 
cost is not reduced. The saving is thus confined to less overhead and 
greater capacity due to increased production. 

Old foundry defective from all causes when netting 15.15 good 
cases per day was 25 per cent. 

Foundry defective from all causes under intense bonus production 
when netting 28.35 good cases per day was but 9.83 per cent. 

Foundry defective loss under intense bonus production and Scien- 
tific Management methods was reduced 60.7 per cent. 

Average bonus equals 42.2 per cent over regular day wages. 

Fig. 12 shows a typical core job, on which the average 
daily production is 1,305 cores per nine-hour day. The 
core illustrated is a Packard hub cap core. 

Fig. 13 represents another large floor job. This is a four- 
cylinder oil pan for which three sets of equipment were 
made to assure the customer of a production of 75 good 
castings per day. A great many thousand of these pans 
have been made of this design. The average production 
runs from 108 to 115 molds per nine-hour day. 

Another typical core job is illustrated in Fig. 14. This 
is a transmission bearing core and the average production 
is 1,620 cores per nine-hour day. 

Fig. 15 illustrates a transmission job run by a molding 
gang of four men and two laborers employed in dumping 



164 PARKHURST DIFFERENTIAL BONUS 

out and cutting sand. The production on this job averages 
160 to 180 good castings per nine-hour day. 

Fig. 16 illustrates a typical bench job. This is an intake 
manifold, on which the average production is 150 molds 
per nine-hour day. Work of this kind, as well as all other 
bench and squeezer work is covered by the standard data de- 
scribed in Section 13. Fig. 8 referred to in Section 13 illus- 
trates a small variety of the work covered by these standard 
tables. 

Before closing with the subject of the application of dif- 
ferential bonus, attention is called to Table IV. The object 
of listing so many different items rather than expressing 
the results obtained in total lump figures, is to show up the 
great difference in production increases and cost decreases 
between different jobs. In other words, it will be noted that 
production increase runs from only a few per cent to over 
700 per cent. The figures in the cost decrease column in a 
few instances show practically no decrease in cost and in 
others the decrease is 80 or more per cent. These figures 
illustrate better than can be done in any other way, the great 
variations that exist in the average job, both as to the pro- 
duction standard and direct costs. In other words, under 
ordinary methods, it is comparatively easy for jobs to be 
limited in production due to the apparent similarity be- 
tween one job and another. These figures also show up 
the great difference between what in the judgment of the 
average good mechanic should be a day's work and what 
actually should be realized when the facts are accurately 
determined. 

In studying over the figures representing the percentage 
of cost reduction, as shown in Table IV, it can be seen 
that there is a very wide difference on some jobs between 
the production increase and the cost decrease. In other 
words, in some cases the cost decrease is very little and the 
production increase is very high. We also have the reverse 
condition where the cost decrease is high and the production 
increase is much lower. All of these go to prove the neces- 
sity which the job should run, as well as the proper balance 
of labor required to run that job efficiently. 




LECTURE XXVII 

DEPARTMENTAL AND PLANT EFFICIENCY BONUS 

27-A. Departmental Efficiency Bonus 
27-B. Plant Efficiency Bonus. 

This lecture will cover certain applications of departmental and. 
plant efficiency bonus, but owing to the limited time, the subject must 
be most superficially dealt with. The student is referred to the author's 
"Scientific Time Study and Differential Bonus" now in the course of 
preparation, for complete information on the whole subject of special 
and efficiency bonuses. 

27-A. Departmental Efficiency Bonus 

The foregoing lectures have introduced in considerable 
detail, different phases of time study and bonus work. Vari- 
ous applications of bonus based on standard elemental sub- 
operation times have been referred to, always in connection 
with some specific job or operation. To complete the en- 
tire scheme of differential bonus as used by the author, it 
is necessary to provide bonuses for the department heads 
or department executives who have to do with the operation 
of the department as a whole. Departmental efficiency 
bonuses cannot well be determined until substantially all of 
the direct and indirect operations or jobs have been success- 
fully placed on bonus. 

In an attempt to solve the problem of equitably applying 
differential bonus to departmental and plant efficiencies, 
some rather extensive studies had to be conducted to bring 
certain elements of indirect and technical, as well as clerical 
labor, under control and to schedule same on a bonus pre- 
paratory to getting the departmental efficiencies themselves. 
These studies involved the determining of necessary factors 
for control of furnace performance, pouring gangs, chill 
sorters, wire straighteners, sand and metal handling, sand 
mixing, knocking out cores, inspection, trimming, soldering, 
welding, calculating and posting bonus slips, etc., etc. For 

165 



l66 DEPARTMENTAL EFFICIENCY BONUS 

instance, I give below a copy of Bonus Chart 9053D, which 
represents an efficiency bonus chart for carrying and pour- 
ing metal. It is an example of a study, which, though not 
particularly complex in itself, took considerable time to com- 
plete and had to be completed before the bonus could be 
issued. 

BONUS CHART 9053D, MAY 1, 1917; DEPT. IF, 
BONUS CLASS 4 

Efficiency Bonus Chart for Carrying and Pouring Lynite Metal 

to 1M and IMa When Using a Hand Ladle and 

Two Wheel Carrier 

Standards : 

.103 man minutes per pound metal poured in 1M unit. 
.164 man minutes per pound metal poured in IMa unit. 

The following differential bonus will be paid in addition to 
hourly wages, based on the number of pounds of metal poured 
by the men who used the hand ladles and the two wheel carriers 
in 1M and IMa department, except that all defective castings due 
to the carelessness of the pouring gang will be deducted when 
paying bonus. 

The following instructions and specifications must be strictly 
followed : 

Equipment : 

The following equipment is to be used when pouring Lynite 
metal in 1M foundry unit: 

1 — An iron hand ladle which weighs when empty 26 pounds 
and when full of molten aluminum metal within 1" from 
the top will hold 28 pounds of metal ; with the ladle use a 
two wheel carrier which can be pushed over the floor with 
very little effort. 

2 — A pyrometer is located at the North entrance of 1M, in a 
convenient place so every pot can be tested for correct 
temperature; the man carrying metal must skim every pot 
while the temperature is taken. 

3 — Time allowance is figured in the standard time to keep all 
equipment in first class condition. Each pouring pot must 
be cleaned and blackened every morning and the carrier 
oiled. When not in use all equipment is to be kept in its 
proper place. 






FREDERIC A. PARKHURST 1 67 



4 — The pouring gang must keep the floor clean around the 
pyrometer for a radius of five feet. They must not allow 
any accumulation of skimmings or spilled metal to collect 
at this place. 



Method 



The method used in handling the melted metal with hand 
ladle and carrier is as follows : One man operates the hand ladle. 
He dips the metal out of the furnace with the same ladle he used 
to carry the metal. The ladle is then placed in the two wheeled 
carrier and the man pushes carrier along on the floor to the pyro- 
meter. Here the metal is tested for temperature, and each ladle 
full is skimmed. The metal is then taken where it is needed and 
poured. The operator returns to the furnace ready for another 
ladle of metal. 

Tally : 

The tally will be taken from the production report and listed 
on a special sheet, a sample of which is incorporated in this chart. 

Gr. Wgt. Gr. Wgt. 

No. Pounds Pounds Time Gang 

Piece Cstgs. Per Metal Man Worked Dept. Effi- 

Dept. Symbol Poured Casting Poured No. Minutes Worked ciency Bonus 

The weights of each casting must include all gates, sprues, 
risers, etc., and the total weight of metal poured will be computed 
by multiplying the gross castings weight by the number of cast- 
ings made from each pattern. The total for all patterns will give 
the total weight of metal carried for the day. All defective cast- 
ings due to any fault of the pouring gang will be deducted when 
figuring bonus and the gang zvill lose credit for the pounds of 
metal in every defective casting they make. 

Standard Times : 

The standard time by which the bonus will be figured when 
carrying metal in hand ladle using two wheel carrier from any 
part in IF to any point in 1M unit is .105 man minutes per pound 
of metal poured. 

The standard time by which the bonus will be figured when 
carrying metal in hand ladle using two wheel carrier from any 
point in IF to any point in IMa is .164 man minutes per pound 
of metal poured. 

Method of Figuring- Bonus : 

The bonus will be figured daily from the production report 
and when the total efficiency reaches 80%, bonus in Class 4 will 
be paid in proportion to the time each man works on the job. A 
specimen sheet showing the computation of the bonus is incor- 
porated in this chart. 



1 68 DEPARTMENTAL EFFICIENCY BONUS 



Example of Figuring Bonus : 

Total pounds of metal poured in 1M 10,000 pounds 

" IMa 5,000 pounds 
10,000 X -103 = 1030 standard man minutes 
5,000 X .164 = 820 

Total 1850 

4 men worked 9 hours on the job. 

4 X 540 = 2160 actual man minutes. 

Then the standard man minutes divided by the actual man 
minutes worked on the job equals the working efficiency of the 
gang. 

1850 

= 85.5% Efficiency 

2160 

85.5% Bonus, Class 4, pays $.739 bonus for 9 hours for each man. 

The following prices will not be lowered no matter how long 
the job may operate provided the method and equipment specified 
in this chart are not changed. 



EFFICIENCY BONUS CHART 9053D, 

BONUS CLASS 4 

Standard : 

.103 Man minutes per pound for all metal poured in 1M 
.164 " " " " " " " " " IMa 

Differential for 1% Efficiency = $.018 

Gang Bonus Gang Bonus 



efficiency 


Paid 


Efficiency 


Paid 


9 hrs. 


9 hrs. 


9 hrs. 


9 hrs. 


80 


.640 


91 


.838 


81 


.658 


92 


.856 


82 


.676 


93 


.874 


83 


.694 


94 


.892 


84 


.712 


95 


.910 


85 


.730 


96 


.928 


86 


.748 


97 


.946 


87 


.766 


98 


.964 


88 


.784 


99 


.982 


89 


.802 


100 


1.000 


90 


.820 







In reference to the above bonus chart, the following tabulation 
shows a record under date of May 1, 1917, of how the tally was 
kept on this job for the several men employed. 



FREDERIC A. PARKHURST 



169 



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W £ 

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H W 



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OS s 

Ph *** 



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up in 10 in in OOOOO t^h 1^ ^h ,-t tm 00 CC i 00 00 



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00000 






00000 ino>ni-nin 
t^r^t^t^oo t^ vo r~* t^ 00 

iO irj >0 10 M VO vn VO VO 'O 



ooomm ommo 

KKtNO ON0000MD 

m in m m cm \o m in 00 



QQQQ 

CM CM CM CM 
in in in in 

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0\ On On On 



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CM CM CM CM 

in in in in 

OOOO 
On On ON On 



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CM CM CM CM 

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On On 0\ On 



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in in in 



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Pouring 
.616 
628 
666 


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\0 NO NO NO 


m co CM ■* 

CM CM OCn 

\o>ovopo 



I7O DEPARTMENTAL EFFICIENCY BONUS 

As another example of what is involved in the preparation prior 
to the determination of departmental efficiencies, the following record 
of a study in connection with department 1Q devoted to the mixing of 
core sand, will be of interest: 

TIME STUDIES IN iQ 

THE PROBLEM 

The work in iQ Department consists of a great number 
of miscellaneous operations, all of which pertain to the 
mixing of core sand. 

The sand is unloaded from the cars in the storage sheds 
and storage yards and used from storage as conditions 
of production demand. The outline of sand storage plan 
(a copy of which accompanies this report) shows that 
there are twenty-two different storage sheds and one stor- 
age yard, all at different distances from the sand mixing 
room. The sand is brought from the storage shed to the 
mixing room in wheel barrows and dumped in special bins 
provided at mixing machines. 

Before the time studies were taken it was necessary to 
slightly rearrange the layout of the sand mixing department 
and blue prints show the arrangement before and after the 
change was made. The big item in this change was keep- 
ing the sand wheelers from delaying the work of the man 
who fills the pails. The new arrangement as shown on the 
blue print shows how the wheelers fill the storage spaces 
from behind and do not interfere with the men who fill the 
measuring pails for the machines. 

The other miscellaneous operations in iQ Department 
are as follows : 

1. Filling the measuring buckets for mixing machines. 

2. Mixing regular standard and special batches with machines. 

3. Mixing special standard batches with small electric riddle. 

4. Transferring of the mixing sand by the Lary car to the core- 
rooms. 

5. Grinding rosin and sweeping up the floor and miscellaneous 
trips to the stock-room for supplies. 

These operations were carefully investigated and studied 

with watches until the times and standard methods were 

established. 



FREDERIC A. PARKHURST \J\ 

Method 

The method used to establish the standards was as fol- 
lows : 

The first job study was for wheeling sand from the stor- 
age bins to the mixing machine. Several different men 
were taken and observations made on their work. We 
wanted to select a man who was steady and reliable in this 
work and a good average worker. Observations were made 
on eight men until we found the man who met the physical 
qualifications the conditions required. The elemental de- 
tailed studies were studied until they were all standardized 
as follows : 

1. Trip from the mixing room to the storage shed, wheel-barrow 
empty, standardized on a basis of the distance per foot. 

2. Load wheel-barrow with sand, standardized on a basis of six 
buckets per load or three hundred pounds per trip. 

3. Trip from the storage shed to the mixing room, wheel-barrow 
loaded, standardized on a basis of per foot of distance traveled. 

4. Dump sand in storage bin, standard for all loads. 

When these standards were determined they were used 
to figure the standard times per trip to storage bins and 
bonus was established on this standard time per trip. (Op- 
erations 2 and 4 are standards for all trips ; Operations i 
and 3 depend on the distance traveled.) 

In order to have a good check on. our standard time we 
have selected several different men and made complete day's 
observation on their work. We found these men made 
bonus for the total day's work for several days in succession 
and were anxious to be put on bonus. 

Other operations have been timed and studied in the same 
manner and in every case these elemental operations were 
standardized and often used on several different operations. 

Based on the above, bonus chart 9036D, dated Feb. 12, 
19 1 7, applying to department DiQ was issued reading as 
follows : 



172 DEPARTMENTAL EFFICIENCY BONUS 

FORMULA USED IN COMPUTING THE STANDARD 
TIMES FOR WHEELING SAND FROM STOR- 
AGE BINS TO MIXING MACHINES 

(WxL) plus (DxT) plus K plus (dxt) equals Time 
Allowed for wheeling standard load of sand any dis- 
tance, where 

W = weight of sand 

L = standard loading time per pound 

D = distance wheeling load 

d = distance wheeling empty wheelbarrow 

T = standard time for wheeling a standard 300 pound load a 

distance of 1 foot 
t = standard time for wheeling empty wheelbarrow distance 

of 1 foot 
K = standard time dumping load. 

The following are the values for the items listed 
above, these all being - based on detail time studies. 

W — 300 pounds sand 

L = .00415 minute 

D = distance wheeling loaded wheelbarrow 

T = .054 minute time to wheel standard 300 pound load distance 

of 1 foot 
d = distance to wheel empty wheelbarrow 
t = .004 minute time to wheel empty wheelbarrow distance of 

1 foot 
K = .22 minute time to dump load. 

Fatigue allowances were as follows : 

10% additional time for all trips beyond one-half the distance 
down the shed. 

20% additional time for all trips that were not further than one- 
half the distance down the shed. 

BONUS CHART 9036D, FEB. 12, 1917; DEPT. 1Q, 
BONUS CLASS 4 

Bonus Chart for Wheeling Sand in iQ from the 

Various Sand Sheds and Yard Storage to 

the Mixing Machines, 300 Pounds of 

Sand for a Wheel-Barrow Load 

Operations : 

•Load wheel-barrow. 
Wheel to mixing machines. 
Dump sand in bins. 
Return to sand storage. 



FREDERIC A. PARKHURST 1 73 



Equipment 



All sand is to be wheeled in a metal wheel-barrow with ca- 
pacity of three hundred pounds or more of sand. A good sand 
shovel which will hold not less than twenty-one pounds of sand. 

Method : 

The sand is loaded in wheel-barrow not less than three hun- 
dred pounds per load and wheeled to bins in mixing room where 
it is dumped into the proper bins. 

Method of Tally and Computation of Bonus : 
Example of Figuring Bonus : 

A tally clerk stationed at the entrance of the mixing room 
records the man's numbers, the bins from which he wheels the 
sand and the clock time each load is delivered. The number of 
wheel-barrow loads from each bin is multiplied by the respective 
standard man minutes allowed. The standard man minutes di- 
vided by the actual minutes worked by the operator equals the 
working efficiency and bonus will be paid according to the working 
efficiency of the operator. 

In case a weighing scale is installed, all sand will be weighed. 
The total weight of sand wheeled by one man from each storage 
bin, multiplied by the standard time per pound for that respective 
bin equals the standard minutes. The standard minutes divided by 
the actual minutes equals the working efficiency. 

Bonus will be paid according to the working efficiency of the 
operator. 

The following is a list of standard times per trip and standard 
time per pound of sand wheeled : 





Standard Time in 


Standard Time in 


n Door 


Minutes per trip 


Minutes per pound 


1 


2.24 


.00746 


2 


2.44 


.00748 


4 


2.64 


.00880 


5 


2.45 


.00817 


6 


2.98 


.00993 


8 


3.20 


.01067 


10 


3.43 


.01143 


12 


3.65 


.01216 


14 


3.73 


.01242 


16 


3.93 


.01310 


18 


4.20 


.01400 


19 


3.81 


.01270 


20 


4.51 


.01503 


21 


4.20 


.01400 


22 (yard) 


5.39 


.01799 


23 


4.51 


.01503 



174 DEPARTMENTAL EFFICIENCY BONUS 



Example of Figuring- Bonus : 

Suppose one man wheeled thirty-eight loads of sand from 
pile in the yard, seventy-five loads of dry sand from door 1, and 
twenty loads from door 14. This man worked nine hours on the 
job. Determine his bonus. 

38 loads from yard X 5.39 Standard Min. Allow = 204.82 Std. Min. 

75 " " door X2.24 " " " = 168.00 " 

20 " " " 14X3.73 " " " = 74.60 " 



Total 447.42 " 
Total standard minutes worked = 447.42 
" actual " = 540. 

447.42 

Man efficiency = 82.8 

540 
For 82.8% efficiency for 9 hours in Class 4 pays $.690 Bonus. 

The following prices will be paid as bonus in addition to 
hourly wages based on the working efficiency of each man on the 
job. These bonus prices will not be lowered no matter how long 
the job may run, provided the equipment and method specified in 
this chart are not changed. 

Differential per 1% efficiency = $.018 



% Efficiency 


Bonus Paid 


% Efficiency 


Bonus Paid 


9 hrs. 


9 hrs. 


9 hrs. 


9 hrs. 


80 


.640 


91 


.838 


81 


.658 


92 


.856 


82 


.676 


93 


.874 


83 


.694 


94 


.892 


84 


.712 


95 


.910 


85 


.730 


96 


.928 


86 


.748 


97 


.946 


87 


.766 


98 


.964 


88 


.784 


99 


.982 


89 


.802 


100 


1.000 


90 


.820 







As another example, bonus chart 9058D issued May 26, 1917, 
for department D1Q is reproduced below. This chart covers the 
preparing of pitch and rosin for binders, the delivery of binders 
to the mixing machines, and various janitor's duties in depart- 
ment 1Q. 

BONUS CHART 9058D, MAY 26, 1917; DEPT. 1Q, 
BONUS CLASS 3 

Efficiency Bonus Chart for Preparing Pitch and 
Rosin Binder, Deliver Binder to Mixing Ma- 
chines and Various Janitor Duties 
Department iO 

Bonus paid 80% efficiency. 

Standard per pound rosin and pitch prepared for mixing ma- 
chines .14 man minutes. 
Trip to IN with refuse 8 man min. 
Trip to stock room for supplies 5 man min. 
Shovel in elevator all loose sand 30 man min. 
General sweep and clean-up of entire department 30 man min. 



FREDERIC A. PARKHURST 1 75 

The following differential bonus will be paid in addition to 
hourly wages, based upon the number of pounds of pitch and 
rosin binder delivered to sand mixing machine and also upon the 
efficiency attained in the performances of certain other duties as 
specified in this chart. 

The following instructions, methods and specifications must be 
strictly adhered to : 

Duties and Standard Time Allowance for each : 

GROUP No. 1 

1. Breaking open barrel of rosin or pitch in yard. 

Using a pickax the iron hoops are cut in two and then 
with a few blows the barrel will fall apart. The top, bot- 
tom and staves of each barrel must be cleaned of rosin or 
pitch by scraping with the edge of a shovel. The staves, 
top and bottom are placed in a pile and the hoops ar- 
ranged in another pile. 

2. Delivery of Material 

The barrel staves, tops and bottoms are loaded on a wheel- 
barrow and taken to wood pile in yard. It is possible to 
load the wood from about two barrels at one time. The 
hoops are wheeled to box in yard for holding rubbish. 
The rosin or pitch is loaded in a wheel-barrow and hauled 
to 1Q where it is placed in separate bins until such time 
as used. During rainy weather the barrels must be in- 
doors when opened. 
Standard time for Group No. 1 (operations 1 and 2) .0483 
man min. per pound. 

GROUP No. 2 

3. Filling pulverizing mills with pitch and rosin. 

The pitch and rosin should be broken into small lumps 
before being placed in the mills. E'ach mill should be 
filled to its capacity and refilled as soon as possible. The 
mixtures must be thoroughly pulverized and must be free 
from lumps when taken from the mill. 
Standard time for Group No. 2 (operation 3) .0557 man min. 
per pound. 

GROUP No. 3 

4. Delivery of mixture to sand mixing machines. 

As to the pitch and rosin, it is pulverized and the mixture 
taken from the mill and shoveled into metal tote pans or 
at times into a large wooden box which has a capacity of 
six tote pans. The pans or boxes are weighed and then 
dragged in to the sand mixing machines. It is important 
that there be a sufficient supply of rosin and pitch binder 
at the sand mixing machines at all times. 
Standard time for Group No. 3 (operation 4) .0360 man min. 
per pound. 

As the operations in Groups 1, 2 and 3 are all based upon the 
same factor, — that is, the pounds of mixture produced, they can be 
considered as one unit. So the total of the standard times for 
Group 1 (1. Breaking open barrel of rosin or pitch .0403 man. min. 

(2. Delivery of material .0080 " 

Group 2 (3. Filling mills .0557 " 

Group 3 (4. Delivery of binder .0360 " " 

Total .1400 " 



I76 DEPARTMENTAL EFFICIENCY BONUS 

GROUP No. 4 
Miscellaneous Operations : 

5. The refuse which comes from the riddle on the sand mix- 
ing machine is to be wheeled to the riddle in Dept. IN. 
The wheel-barrow must be well filled; no time will be 
allowed unless wheel-barrow is full. 

Standard time for this operation is 8.00 minutes per trip. 

6. Sometimes it is necessary for a man to be sent to the store 
room for supplies. 

Time allowance for this operation 5.00 minutes per trip. 

7. Sand falls from buckets in elevator and must at times be 
shoveled into pit. 

Time allowance for this operation 30 minutes per day. This 
work should be done as often as it is necessary in order to keep 
floor clean. 

8. For making a general clean-up of the entire floor of 1Q 
so that it is satisfactory to the foreman, an allowance of 30 minutes 
per day is made. 

Equipment : 

1. Metal wheel-barrow, common foundry type. 

2. Short spade. 

3. Ordinary pickax. 

4. Hammer for breaking lumps of rosin and pitch. 

5. Four pulverizing mills. 

6. Metal tote boxes ; average capacity sixty-two pound mixture. 

7. Large wooden box ; capacity equal to six tote boxes. 

8. Broom. 

Method of Figuring Bonus : 

The bonus will be figured daily from a standard tally sheet 
showing the total pounds of rosin and pitch binder delivered to 
the sand mixing machines. Time allowance is made for each load 
of refuse wheeled to IN ; for each trip to store room for supplies, 
for shoveling sand which falls from elevator into pits, and for 
general sweeping up of the floor of mixing room, including pas- 
sageway as far as 2F department. 

Suppose thirty-one hundred pounds of binder are delivered to 
mixing machines. 

The standard time per pound for all operations covering 

the preparation of the binder is .14 man minutes. 

3100 X -14 = 434 standard man minutes. 

Also four wheel-barrow loads of rubbish were hauled to 

riddle in IN. 

4 X 8.00 = 32.00 standard man minutes. 

Sand was shoveled into elevator pits in a satisfactory man- 
ner during the entire day. 

Allowance 30 man minutes. 

The entire floor of mixing room was cleaned in manner 

satisfactory to the foreman. 

Allowance 30 man minutes. 

No trips made to store room. 



FREDERIC A. PARKHURST 1 77 

Total standard man minutes for all operations — 

1. Preparation and delivery of mixture 434. 

2. Wheel into rubbish heap 32.00 

3. Shovel sand into elevator pit 30.00 

4. General sweep up 30.00 



Total 526.00 
Man's clock card showed 9 hours, or 540 
Standard minutes 526 

Efficiency — ■ or = 97.5% 

Actual minutes 540 
The bonus for 97.5% efficiency for 9 hrs. in Class 3 = $.717 
The following prices paid as bonus will not be lowered, no 
matter how long the job may operate, provided the method and 
equipment specified in this chart are not changed. 
Differential per 1% efficiency = $.0135 



Efficiency 


Bonus Paid 


Efficiency 


Bonus Paii 


9 hrs. 


9 hrs. 


9 hrs. 


9 hrs. 


80 


.480 


91 


.629 


81 


.494 


92 


.642 


82 


.507 


93 


.656 


83 


.521 


94 


.669 


84 


.534 


95 


.683 


85 


.548 


96 


.696 


86 


.561 


97 


.710 


87 


.575 


98 


.723 


88 


.588 


99 


.737 


89 


.602 


100 


.750 


90 


.615 







There are many more similar and many more complex 
problems which have to be solved before the departmental 
efficiency determinations can be made. 

I am bringing in unusual applications of time study and 
differential bonus so as to illustrate the point that depart- 
mental efficiency does not always, in fact very seldom, de- 
pend solely on the average efficiency of all of the direct jobs 
or operations which may themselves be under bonus. In 
machine departments, or departments working with purely 
mechanical apparatus and with material that can be con- 
trolled by the piece, the application of departmental effi- 
ciency bonus is very simple. In the foundries, for example, 
there are a variety of elements of indirect labor which in 
themselves represent, in the aggregate, a very large propor- 
tion of the man hours worked in the plant. These must be 
brought under control by a scientific analysis and some equi- 
table scheme of bonus developed to remunerate these men 



I78 DEPARTMENTAL EFFICIENCY BONUS 

for high efficiency, or else to obtain, departmental efficiency 
records, we should have to exclude a tremendous proportion 
of the hours. This has been done in some plants because 
it has been considered impracticable or far from economi- 
cal to take the time to bring these elements under control. 

Department DiQ referred to above was under observa- 
tion by two time study men for an aggregate time for them 
both, totaling nearly four months. The result of the study, 
however, enabled us to put all of the labor in that depart- 
ment on bonus, greatly increasing its efficiency and effecting 
a saving in a short time equal to about 2000 hours per week, 
or $600.00; or a saving of about $2500.00 per month based 
on the same volume of business. 

After all of the various classes of work mentioned above, 
and all of the direct or indirect operations or jobs have been 
standardized and controlled through the medium of bonus 
charts, and men have been trained to work in accordance 
with them, a department report is issued daily by the tally 
and time clerks to the time study department. These re- 
ports are totaled for the week and from them is determined 
the departmental efficiencies. 

Based on such records as the foregoing, it is possible to 
institute the departmental efficiency bonus, which is well 
illustrated by our departmental and plant efficiency bonus 
chart 9030D, copy of which follows : 

DEPARTMENTAL AND PLANT EFFICIENCY BONUS 
CHART 9030D, FAP 205 

Bonus Covered by this Chart is Payable only to 
Foremen and Department Heads, and in Ac- 
cordance with Instruction 145. 

The efficiency bonus will be figured for each department separately 
as fast as bonus in each department will permit of the department 
reaching an efficiency of at least 60%. The departmental efficiency 
bonus will be paid every week based on each department's efficiency, 
irrespective of the efficiency of other departments. 

On the 15th of every month, an additional bonus will be paid, 
based on the average plant efficiency of the whole plant. 



FREDERIC A. PARKHURST 



179 



The Bonus will be figured in accordance with the following for- 
mula in which : 

H = Hours paid for in each department or plant, 
h = Hours on Bonus. 

R = Reciprocal of average efficiency of all jobs on bonus X 100. 
K = Constant (2) 
H 

= Department or plant efficiency. 

h X R + K (H-h) 

The above formula is the same for both departmental and Plant 
efficiency, except that the value given to each of the symbols will be 
the department values in one case and the plant values in the other. 
The value given to "H" in every case will be the total hours paid 
for as shown by the clock time cards exclusive of certain hours rep- 
resented by a list on file with the Local Manager, which are to be de- 
ducted when figuring each department's and each plant's value for "H." 
Example of Bonus Figured 
H = 1242 hours 
h = 1011 " 
Average efficiency for all jobs = 92% 

1 x 100 

R = = 1.088 



92 



Then : 



1242 



1242 



1011 X 1.088 + 2 (1242-1011) 1561 
.795 X 100 = 79.5% 
79.50% pays 15.77% Salary 



= .795 



iciency 


% of Salary Paid 


Efficiency 


% of Salary Paid 


100 


25.00 


79 


15.55 


99 


24.55 


78 


15.10 


98 


24.10 


77 


14.65 


97 


23.65 


76 


14.20 


96 


23.20 


75 


13.75 


95 


22.75 


74 


13.30 


94 


22.30 


73 


12.85 


93 


21.85 


72 


12.40 


92 


21.40 


71 


11.95 


91 


20.95 


70 


11.50 


90 


20.50 


69 


11.05 


89 


20.05 


68 


10.60 


88 


19.60 


67 


10.15 


87 


19.15 


66 


9.70 


86 


18.70 


65 


9.25 


85 


18.25 


64 


8.80 


84 


17.80 


63 


8.35 


83 


17.35 


62 


7.90 


82 


16.90 


61 


7.45 


81 


16.45 


60 


7.00 


80 


16.00 







Differential 1% Efficiency Pay, .45% of Salary. 
THE ALUMINUM CASTINGS CO. 

January 1, 1917. 



l8o PLANT EFFICIENCY BONUS 

27-B. Plant Efficiency Bonus 

The determination of the plant efficiency bonus is a com- 
paratively simple matter, as it is calculated at the end of 
each month from a summary of the performance of each 
department for that month. The departmental summary is 
made up from weekly departmental records mentioned pre- 
viously in this lecture. 

The departmental efficiency bonus shown above is paid 
every payday and for the departmental efficiency for the 
last preceding week. The plant efficiency bonus is paid on 
the 15th of each month on the plant efficiency for the pre- 
ceding month. 

As previously stated, the determination of these depart- 
mental and plant efficiencies is one of the last steps to be 
taken in connection with the installation of scientific meth- 
ods throughout the operating departments of a plant. By 
the time the departmental and plant efficiency bonuses are 
in operation and bonus is being earned under the schedule 
described in this lecture, substantially everyone in the organ- 
ization except certain office employees, is participating in 
some kind of a bonus. Each plant and each department in 
the plant works in accordance with a list authorized from 
time to time, naming those who participate in either the 
departmental or plant efficiency bonus, or both. Likewise, 
there is a standard list published which controls the number 
of hours which can be subtracted from the total hours 
worked in each department or plant before the "H" hours 
are computed. 

The following table is a typical example of how the de- 
partmental efficiency is summarized for each month. The 
total gives the plant efficiency on which to base the plant 
efficiency bonus. 



FREDERIC A. PARKHURST 



I&I 



™ WC 3 
tg o ^ rt C 

^"3 5 « S 

£"-*-. Oh o 

o oW 



P 



W = 3 



rt ^_K 3 
t! 3 n) C 



H^S 






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LECTURE XXVIII 

DEPARTMENTAL AND PLANT EFFICIENCY RECORDS 

The following describes how the above records are prepared and 
the use that is made of them, and emphasizes the importance of con- 
trolling all of the factors involved in the determination of depart- 
mental and plant efficiency records. 

The previous lecture described some of the detail on which 
departmental and plant efficiency bonus records are based. 
These records must be prepared from the actual perform- 
ance daily of all the jobs on bonus and in accordance with 
the formula shown on bonus chart 9030D. 

The tabulated summary of departmental bonus efficiencies 
is made up from the daily job tally, time cards and bonus 
pay slip records. These records are all checked against the 
clock time cards and the bonus production reported is 
checked against the inspector's report, so that all deductions 
due to defective material may be approved before passing the 
bonus slip through for approval and payment. 

The fact must not be lost sight of that the proper time- 
keeping on individual jobs or operations, as well as the 
tallying of the production of each job, are of vital import- 
ance. In speaking of production, it is understood of course 
to mean production of good pieces or good work which pass 
all the inspection required in accordance with the drawings, 
specifications, standards, etc., as they may be established 
from time to time for the different classes of work. 

As the installation of time study methods progresses, the 
requirements for time keeping and job tallying increase, as 
it is of paramount importance that the performance of each 
department be checked by other controlling records to assure 
the fact that bonus being paid to the men is justly earned. 
As the data is the foundation of the departmental and plant 

182 



FREDERIC A. PARKHURST 1 83 

efficiency records, it is of course vitally important to have 
it correct, because if incorrect, all records relating- to the 
efficiencies mentioned will also be incorrect. 

If careful control and auditing of the work of the ac- 
counting, time-keeping and job tally clerks is maintained, 
then the maximum economy will result. The maintenance 
of all control is of course an organization requirement. As 
these records deal with the disbursement of large sums of 
money, it is just as important that they be audited and cor- 
rectly handled, as it is to follow such practice with account- 
ing or book-keeping methods, in the control of cash and 
other accounts. Failure on the part of the Comptroller's 
Department to maintain through audit the accurate perfor- 
mance of the clerical work should not be blamed on the 
method, but rather on the execution. This is of vital im- 
portance and too much emphasis cannot be placed upon it. 

The time-keeping and shop clerk departments are of such 
vital importance that the personnel of same should be given 
unusual attention. In other words, the men employed in 
these two divisions are responsible for the disbursement of 
many thousands of dollars monthly in a plant of consider- 
able size and they should be chosen on qualifications just as 
rigid as any required for a Cashier or a Paymaster. The 
records required of these two departments and which are 
checked against the standard time sheets by the planning 
room time study staff, form the basis of pay for all direct 
and indirect bonus operations and the final determination, 
as above stated, of the departmental and plant efficiencies. 
From these efficiencies the department heads and other shop 
executives receive their extra remuneration. Obviously, the 
secret lies in properly maintaining- the organization lineup 
and by audit, insuring honest and satisfactory performance. 

As a record of the control to be exercised in connection 
with the work of the tally clerks, a reproduction from the 
following bonus chart, 9002D, will suffice as a typical ex- 
ample how the work of these men is scheduled. 



184 DEPARTMENTAL AND PLANT EFFICIENCY RECORDS 

BONUS CHART 9002D, APRIL 12, 1917; DEPT. 2U, 
BONUS CLASS 2 

Efficiency Bonus Chart Specifying the Duties and 
Operations of the Tally Clerk in 

Department 2U 

A bonus will be paid daily to each tally clerk in the 2U department 
when he has correctly and completely performed the following opera- 
tions : 

1. The tally clerk is required to list on a tally sheet, FAP 115, a 
correct count of each operation performed by the workmen in 
2U department. He also is required to list on the tally sheet, 
FAP 115, in the spaces provided, the number of the man who 
works on the job, the work number of the job, the piece symbol, 
and the operation symbols. 

2. It will be the duty of the tally clerk to notify the time clerk, 
also the route clerk, as to each job that is working without the 
proper work ticket, FAP 231, at the machine in the holder 
provided. 

3. The tally clerk will keep the correct bonus chart in the holder 
provided at the machine where the operator is working. It is 
also required that the tally clerk keep the idle bonus charts 
neatly filed and to see that new charts are substituted for those 
that are torn or lost and that his file of charts is at all times 
complete and in order. 

4. The tally clerk will see that a lot tag is on each pan, box or 
barrel of castings in the shop, showing the lot number of the 
job, the piece symbol and number of pieces in the lot. 

5. All disputes regarding shortages on counts are to be referred" 
to the route clerk and shop foreman for settlement. 

6. Accuracy in work and courteous manner towards all workmen 
are the essential requirements for every tally clerk who expects 
to make bonus on this chart. 

The following penalties 'and percent are deducted for each offense: 

1. For every minute late in the morning, 1% will be deducted 
from the standard efficiency of 100% for the day. 

2. For tally sheets not made out neatly and clearly, 5% will be 
deducted. 

3. Wrong tally on sheet, 5% will be deducted. 

4. Wrong work number listed, 2% will be deducted. 

5. Wrong piece symbol listed, 2% will be deducted. 

6. Wrong operation symbol listed, 2% will be deducted. 

7. Wrong man number listed, 2% will be deducted. 

8. The absence of work orders at machine, 2% will be deducted 
for each work order. 

9. The absence of bonus chart at machines, 1% will be deducted. 

10. The wrong bonus chart at machine, 2% will be deducted. 

11. Careless filing of idle charts, 5% will be deducted. 

12. Incomplete file of charts, 5% will be deducted. 



FREDERIC A. PARKHURST 1 85 

13. For each missing lot ticket on every pan, box or barrel in the 
shop, 1% will be deducted. 

14. Discourtesy to superiors or shop workmen, 10% will be de- 
ducted. 

15. One hour, after the shop closes down, will be allowed to take 
the final count. For every minute over the allowed hour that 
is. registered on the clock card, 1% will be deducted. 

16. Bonus will be paid on a basis of 80% efficiency, Bonus Class 2. 
Every day the efficiency is below 80%, it will count one de- 
merit. Five demerits in succession will be sufficient cause for 
discharge. 

17. The following prices will be paid in addition to hourly wages 
based on the daily efficiency of each tally clerk. These prices 
will not be lowered but the time study chieT reserves the right 
to cancel this chart if it is not worked exactly to specifications 
and instructions. 

The time keeper will be responsible for making the deduction on 
items 1, 11, 12 and 15. All deductions are to be reported daily to 
route clerk in written form and he is to file this copy in order of days. 

The superintendent and shop foremen are responsible for making 
deductions on items 8, 9, 10, 13 and 14. The production clerk and 
route clerk are responsible for making deductions on items 2, 3, 4, 5, 
6 and 7. 

The tally clerks are to be listed on a daily bonus report FAP 192 
and hereafter the hours worked by tally clerks will not be deducted 
from the total hours worked in department when figuring the weekly 
departmental efficiency report. 

EFFICIENCY BONUS CHART 9002-D 

Differential per 1% efficiency = $.009 



Tally Clerk's 




Tally Clerk's 




Efficiency % 


_ Bonus Paid 


Efficiency % 


Bonus Paid 


9 hrs. 


9 hrs. 


9 hrs. 


9 hrs. 


80 


.32 


91 


.419 


81 


.329 


92 


.429 


82 


.338 


93 


.437 


83 


.347 


94 


.446 


84 


.356 


95 


.455 


85 


.365 


96 


.464 


86 


.374 


97 


.473 


87 


.383 


98 


.482 


88 


.392 


99 


.491 


89 


.401 


100 


.500 


90 


.410 







As previously stated, bonus is checked and figured in the 
time study department by bonus clerks who do nothing but 
figure and check bonus pay slips and record the bonus pay 
for each man. At the end of the week, the individual bonus 
record is totaled, balanced and reported to the time keeping 
department and a check made and filed with the individual 
bonus records themselves. 



l86 DEPARTMENTAL AND PLANT EFFICIENCY RECORDS 

The following bonus chart, 9054D, will best describe 
how the work of the bonus clerks is brought under control 
and how their work is checked. 

BONUS CHART 9054-D, MAY 7, 1917; TIME STUDY 
DEPARTMENT, BONUS CLASS 3 

Efficiency Bonus to be Paid Bonus Clerks When 

Figuring Bonus and Copying Bonus Slips In 

Departments 1C-2C-3C-4C-1M-2M-3-M 

4M-5M-1T-2T-3T-1I-1W and 2U 

Standards : 

Figure efficiency only .60 minutes 

" bonus " .50 " 

Copy bonus slips .75 " 

Each shortage 3.00 " 

The following differential bonus will be paid weekly in addi- 
tion to salary based on each day's efficiency for figuring bonus and 
copying slips when a standard ten-inch slide rule is used and de- 
partmental bonus reports are figured on FAP 192. 

The daily working efficiency of the operator is based on a 
standard of five hundred units for 100% efficiency for a full day's 
work. Saturday, half-day, two hundred fifty units. Bonus will 
be paid in proportion to the time he works on the job. One unit 
equals one standard minute of time. When the operator has com- 
pleted enough work to give him four hundred units, he is figured 
80% efficient. If it is possible in one day for the operator to 
complete enough work to give six hundred units, he is to be paid 
bonus at the rate of 120% efficient in Bonus Class 3. 

Standard Times : 

The standard for figuring the efficiency only on each bonus 
operation is .60 minutes. The necessary operations for the bonus 
clerk are to first figure the standard minutes on the operation by 
multiplying the standard time by the number of good pieces made 
by the workman. Then divide the standard time by the actual 
minutes worked and the result is the operator's working efficiency. 
The working efficiency is to be inserted with pencil on FAP 192 
in space provided. 

The standard for figuring the bonus on each job that makes 
bonus is .50 minutes. On this operation the bonus clerk is to use 
a standard efficiency bonus chart, a copy of which is enclosed in 
this chart. This gives the amount of bonus paid in each class for 
all efficiencies from 70% to 100% for 9 hours. Then figuring the 
bonus for less than 9 hours the amount of bonus paid for 9 hours' 
work is divided by 540 and the result multiplied by the actual time 
the workmen operated the job. 

The standard for copying the bonus slips is .75 minutes. This 
includes filling in the slips complete. It is to be noted that all 
figures must be made neatly and carefully so there will not be a 
misunderstanding of the figures when the slips are passed on for 
payment. 

The standard for each shortage that is checked and accuracy 
guaranteed by the bonus clerk, is 3 minutes. However, in all cases 



FREDERIC A. PARKHURST 1 87 

where the shortage was the result of carelessness or any fault of 
the bonus clerk, he will be deducted 3 units from the day's total. 

Method of Tally : 

When the department reports, FAP 192, are received and dis- 
tributed, each bonus clerk is to stamp his sheet in the upper left- 
hand corner of the top sheet with a stamp provided. 

This is to be properly filled out as the work progresses and 
when the complete report is figured the record is posted on the 
following form. This record complete is to be signed by the 
operator and given the time study chief at the completion of the 
day's work and it is from this record that bonus will be figured. 

Kxample : Suppose the clerk figures 250 efficiencies 

190 bonus 
copies 190 slips 
Figures and checks 4 shortages 

Then 250 X .60 = 150 Standard units 
200 X -50 =100 
200 X .75 = 150 
4 X3.00 = 12 







Total 412 




412 


= 82.% Efficiency pays $.51 Bonus 




500 




EFFICIENCY BONUS CHART 9054-D 




Differential per 1% efficiency = $.0135 


% Efficiency 




Bonus Paid % Efficiency Bonus Paid 


9 hrs. 




9 hrs. 9 hrs. 9 hrs. 


80 




.480 91 .629 


81 




.494 92 .642 


82 




.507 93 .656 


83 




.521 94 .669 


84 




.534 95 .683 


85 




.548 96 .696 


86 




.561 97 .710 


87 




.575 98 .723 


88 




.588 99 .737 


89 




.602 100 .750 


90 




.615 



Time will not permit of going into further detail as to 
how various reports are made up from analysis of the per- 
formance of all of the departments except to repeat again 
for emphasis, that the auditing of the pay in the form of 
wages, salary and bonus must be in the control of com- 
petent men. In other words, the recapitulation of all figures 
is dependent on the accuracy obtained at the source. The 
management must realize that there are just as important 
economies to be effected and maintained in the indirect di- 
visions of the business as there are in the direct. Sprit 
d' Corps is of vital importance. 



LECTURE XXIX 

INSPECTION 

17. Details of Inspection. 

This lecture will discuss modern methods of inspection and has been 
reprinted complete from the author's "Scientific Management in the 
Foundry," section 17. 

The next most important branch of the organization is 
Inspection. Though we may have completely developed 
and under control our office and sales departments, a prop- 
erly operating Planning Room, routing and controlling 
orders, material and labor, and a well maintained plant, 
these all become useless without the continual supervision 
of the inspection department. 

Inspection must control, to the smallest detail, all of the 
various operations from the first inspection of the design 
to the completion and shipment of the last piece on a cus- 
tomer's order. This is particularly true when we begin to 
realize intense production and where, in addition to an 
hourly rate, we pay a large bonus for extra production. 
Under these conditions the most rigid inspection is neces- 
sary. 

The subject of inspection will be discussed in order of 
the following divisions : 

A— Designing (281). 

B — Detailed drawings (285). 

C — -Complete pattern equipment (291). 

D — Sample cores, mold and casting (294). 

E — Laboratory control of mixtures and pouring temperature (299). 

F— Balance of labor (302). 

G— Details of method (303). 

H — Production standards based on time study (305). 

I — Routine production inspection, including — (306). 

a — Pattern equipment. 

b — Cores. 

c — Molds. 

d— Pouring temperatures. 

e — First inspection of casting — hot. 

f — Knockout inspection. 

188 



FREDERIC A. PARKHURST 1 89 

g — Trimming inspection. 

h — General inspection. 

i — Final inspection. 

j — Service inspection (312). 

k — Inspection Committee. 

Consideration of the design in connection with a cus- 
tomer's engineering department represents the first touch 
of inspection pertaining to that customer's order. It is 
often times possible, by consultation with the customer's 
engineer, to co-operate toward a simplification of design or 
change of sections, or a combination of both. Two heads 
are better than one. 

The promotion of the above method can but result in 
eliminating many causes for loss and delay, when the de- 
sign in the form of a pattern finally reaches the foundry. 

There is a double advantage following this method of 
preliminary inspection in connection with a foundry that 
has highly developed operating methods. Such methods 
give the designing' engineer access to a great deal of data 
covering past experiences that cannot help but be of great 
advantage to him in connection with future work. 

Of course the foundry's engineer is the medium through 
which the customer's engineer and designers get their bene- 
fit of the best foundry practice. 

A more critical inspection now takes place when the de- 
tailed drawing for an individual piece is ready for the pat- 
tern shop. At this stage we have to consider a great many 
different things that we but superficially touch upon when 
the general designing inspection (see 281 above) was 
made. 

Before proceeding with the pattern, equipment there are 
a great many things to consider. These different items in- 
clude, quanity to be made from a pattern, foundry method 
to be employed, cost of the pattern equipment for various 
molds where a choice is possible, method of rigging up, gat- 
ing, flask equipment, etc. 

If the pattern under consideration is a cored job we have 
to consider the style and arrangement of core boxes. This 
brings us down to a minute consideration of the design 



I9O INSPECTION 

and proportions of the pattern. This inspection often leads 
to a modification in design or proportion overlooked at the 
time of the first inspection. 

When considering the matter of equipment the members 
of the factory board are often represented in a discussion 
as to these details. It is also important that the Superin- 
tendent, Time Study Foreman and Foundry Foreman 
should work together toward a settlement of these prelim- 
inaries. 

Too much stress cannot be laid on the fact that pattern 
equipment (excepting perhaps in relation to large produc- 
tion jobs) does not as a rule have the careful attention that 
it should. The average foundry does not know what is 
the best combination of flask dimensions (based on scientific 
knowledge) to get the greatest tonnage from a given pat- 
tern. This statement applies to jobs which may be run 
from either a solid or split pattern, or a gated pattern, or a 
plated pattern. In other words, there is an ideal combina- 
tion for every job. These jobs cannot be intelligently and 
economically planned, and pattern equipment cannot be 
properly made without the accurate standard data and pro- 
duction knowledge which can only be determined by scien- 
tific methods. 

On bench and squeezer work we have also to consider 
those jobs which require matches. The design of the match 
and method of its construction have a very material effect 
on the job when it reaches the foundry. 

A consideration of the items mentioned above in para- 
graph 285 gives us the full knowledge to prepare our com- 
plete pattern equipment. This pattern equipment, as the 
term is used, means not only patterns and core boxes but 
core dryers, matches, etc. Where the flask equipment is 
special and the patterns cannot be adapted to standard flasks 
and boards, then this equipment should also be considered 
as part of the pattern equipment — likewise machine equip- 
ment. 

The machine equipment, the standard and often used 
for many jobs, represents part of a given pattern equip- 



FREDERIC A. PARKHURST I9I 

ment, provided such equipment is designed to run on that 
machine. 

At all stages of the work through the foundry continual 
inspection must be maintained of core boxes, dryers, pat- 
tern equipment, flasks and machines. If this inspection be- 
comes lax we may continue to make cores which the molder 
has to file a bit or we may be tied up for production due to 
lack of a certain number of core dryers. In other words, 
there is much more to the subject of inspection of pattern 
equipment than merely the inspection of a new pattern. 
This inspection must be continuous — patterns must come 
out of the sand at night, be inspected and perhaps "touched 
up" before production starts in the morning. The flasks 
must be watched to see that there is no shift in the pins — ■ 
core boxes must be examined periodically to see that loose 
pieces do not "ram off" or become misplaced due to wear 
or distortion. 

Regular shop inspection on work produced first takes 
place at the time sample castings are made. Here we have 
to consider the inspection of cores, mold and casting. The 
cores should be inspected in the core room and when neces- 
sary gages should be provided to assist in inspection as to 
size and shape. When making sample castings it is well 
to order two or three sets of cores. This method will ex- 
pedite making of samples in the event the first one or two 
castings are lost. 

The inspection of the mold is the next step. This inspec- 
tion should take place before the mold is cored up. At this 
point we have to consider the action of the pattern to see 
that it draws properly. If the pattern does not have proper 
draft or if there something wrong- with the rigging we 
have a torn-up mold. This should be corrected at once 
and another mold tried out until we get the pattern working 
in satisfactory shape. When we have a perfect mold we 
are then ready to provide a necessary gating, after which 
the mold is ready to core up. 

In setting cores in the first mold every core should be 
carefully inspected as to size and fit. The "setting" must 



I9 2 INSPECTION 

be inspected to see that the core prints and cores match 
properly — that the core settles into position and that we 
have a proper thickness of metal as per the blue print. A 
detail blue print of the piece in question should be on the 
floor at the time the sample casting is made. This is par- 
ticularly important where the job is a large floor job or a 
complicated piece. 

Based on past experience by consulting records of pour- 
ing temperatures of similar castings the correct pouring 
temperature for the first casting will be determined. After 
the mold is poured and dumped out an inspection of the 
casting will indicate as to whether the mold was poured 
at the correct temperature or not. Of course, this may not 
become definitely known until after the cores are knocked 
out and the casting chipped. In any event the first one or 
two castings poured will allow us to determine the correct 
pouring temperature. When this has once been determined 
all of the subsequent castings will be poured at that tem- 
perature, within an allowable variation of a few degrees. 
(See Fig. 17.) 

The sample as soon as poured should be "knocked out" 
passed through the trimming and inspection departments 
(see Figs. 18 and 19) and checked by the Chief Inspector 
to see that it agrees with the drawing. After this has been 
done it is ready for delivery to the customer provided it is 
passed in quality, workmanship and size by the Chief In- 
spector. All sample castings are marked with a tag and di- 
rected to the attention of the party at the customer's plant 
who is to give it the first inspection and O. K. A written 
approval of the sample casting is required before the foun- 
dry proceeds with production. 

Prior to the pouring of the casting as described in. 294, 
laboratory control exerts its influence. In other words, 
the mixture is determined and the laboratory control of 
melting and pouring assures the best practical results in 
the pouring of the casting itself. 

All molds are poured by a specially trained gang. The 
pouring gang as well as the furnace men and melters are 



FREDERIC A. PARKHURST 1 93 

under the general supervision of the Chief Chemist in so 
far as the technical part of their work is concerned. By 
this method we eliminate labor and delays caused by the 
molder pouring his molds himself. We are also able to 
restrict the responsibility for a proper melting temperature 
and pouring to technically trained men rather than to the 
average run of untrained mechanics. (See Fig. 17.) 

Laboratory control as above described in itself repre- 
sents another very important form of inspection. In other 
words, through laboratory control we have a study of alloys 
and inspection of mixture and pouring temperatures. 

The balance of labor is pre-determined by our Time 
Study Foreman and our standard production data. When 
production is realized, based on given equipment, and a 
check on the quality of the work turned out, it gives us a 
continual check on our labor. The "man days" worked on 
a given production at a prevailing average rate per man 
day for different classes of labor, checked against our cost 
control chart gives us the equivalent of an inspection con- 
trol on all labor expended. 

In addition to the general labor control, as explained 
above in 302, we have the detail inspection of method. This 
inspection of method consists of the detailed time study 
into the motions and times of operations. All standard- 
ized operations are made up of sub-operations or elemental 
sub-operations. The elemental sub-operations have been 
standardized and standard times determined for them. 
These determinations provide for certain combinations to 
meet any of our standard methods. 

The inspection of equipment and the determination, of the 
method combined with our standard production data gives 
us a perpetual control and inspection of these methods while 
each job is in process. 

After determining the balance of labor in the detailed 
method described above in 302 and 303, the time study 
foreman issues the necessary instructions and Bonus Charts 
to cover the details of the job in process. As mentioned 
in 303 our standard data give us the basis for all of this 



194 INSPECTION 

information, though certain individual time studies may 
be necessary to take care of any specal features peculiar to 
that job. This time study work includes the time study 
necessary to put on bonus core making (each individual 
box is figured separately) molding, knocking out, trimming 
and inspection and any other operations involved in the 
process. 

In paragraphs 281 to 305, inclusive, we have discussed 
the various divisions of work necessary to get a foundry 
job in condition to run. After the submission of the sam- 
ple and a written O. K. from the customer we are then pre- 
pared to run the job on a production basis. The routine 
inspection of the job while it is in process for production 
is very similar to that outlined above. In other words, to 
sum up the above we have during production the following 
stages of production, viz. — 

Inspection of — a — Pattern equipment, 
b — Cores, 
c — Molds. 

d — Pouring temperature and laboratory control, 
e — First inspection — hot casting, 
f — Knockout inspection, 
g — Trimming room inspection, 
h — General inspection. 
i — Final inspection. 

Applying to certain of the above stages of inspection we 
must, of course, have drawings, gages or other standards 
to which inspection shall be made. The use of gages is de- 
sirable in both core and molding rooms. They are also 
equally desirable in many cases in the trimming and final 
inspection rooms, although the entire field under discussion 
is considering only rough castings, not machining opera- 
tions. 

As stated at the commencement of this section on in- 
spection it is absolutely necessary that the various stages 
of the work in process shall have careful inspection along 
the lines indicated above. There can be no economy in a 
delayed core inspection with the resultant loss of a lot of 
cores; nor a delay in the first "knockout"' inspection when 
the casting is hot. The foundry is liable to run ahead with 



FREDERIC A. PARKHURST 195 

a large production before the defect becomes known. Often 
defects will be discovered after the casting has reached the 
trimming table. Oftentimes there will be a strain in the 
casting which, though not sufficient to break it at once, will 
cause it to fracture under the ordinary vibration it gets in 
knocking out cores and during the process of trimming. 
Here we have a defect, the discovery of which was de- 
layed. 

Prompt action is necessary to report all defects back to 
the molding room or the laboratory, as the case may be. 
Sometimes a slight difference in the run of metal will cause 
a crack and it is up to the laboratory to immediately run 
down this trouble. 

We must realize the necessity for continuous control of 
operations, particularly where the men are working at high 
speed and are making large bonuses. When men have been 
trained to do their work with a minimum of motion and 
exertion, keeping their minds and hands continually on 
the job, with proper inspection control the required produc- 
tion can be realized with an A-i quality. This statement 
is not based on any theoretical proposition but on absolute 
facts and experience of years. The writer has one large 
foundry in mind where his methods tripled the production 
and reduced the defective loss 60 per cent. 

We now come to the last word of inspection service, viz. 
— the Service Inspector. The success of service inspection 
depends primarily on two things — one the inspector him- 
self, the other the plant behind him. The Service In- 
spector while primarily a shop man by training and experi- 
ence, should be a member of Sales Department when the 
ultimate scheme of organization is complete. 

It shall be the Service Inspector's duty to keep in touch 
with all of the customers, particularly the larger ones, so as 
to learn as early as possible all of their complaints. He 
must of course keep in touch with the foundry during his 
daily trips. This is particularly true where continuous 
pouring is the practice and the foundry is run solely as a 
jobbing business. 



I96 INSPECTION COMMITTEE 

If the Service Inspector is a practical man he can go into 
the customer's plant and co-operate with the customer's in- 
spectors and mechanics. His service will prove to be one 
that is mutually beneficial. It is only too true that com- 
plaints based on some small minor trouble or defect often 
reach "those higher up," which if given prompt attention 
in the first place by the foundry would never have developed 
into a complaint at all. 

The more thorough knowledge a foundry has through 
its service inspector of the requirements of the customer, 
the accuracy he requires, the better the service. Service 
Inspection is necessary too so that the foundry can tell just 
what part of the work must have particular attention and 
be held to close limits and what part will stand a greater 
allowance of variation. 

The writer believes that the average reader will agree 
with him when he states there is too little harmony between 
the average foundry and the average machine shop. Each 
thinks the other is wrong. It is undoubtedly true however 
that the foundry and machine shop heads are oftentimes 
not sufficiently familiar with each other's trades to allow 
them to work together to the best advantage. Where this 
condition obtains the service inspector, though perhaps in 
an unenviable position, has the opportunity to make himself 
doubly valuable. The advantage of such a service is obvi- 
ous if the right man is chosen for this most important posi- 
tion. 

The purpose of the inspection committee can best be de- 
scribed by referring to the copy of complete instruction 
below : 

Inspection Committee, Instruction LXXX 

To get the best results from our Shop and Service In- 
spection Department, it is desirable that the general scheme 
of inspection be handled along the following lines. This 
instruction is written to govern the general handling of in- 
spection methods entirely separate from the instructions 
applying to regular inspection. 



FREDERIC A. PARKHURST 1 97 

Superintendent, Chief Inspector and Service Inspector 
will be governed by the following" : 

a — Standards will be established from time to time on various 
work; these will include either drawings, references, written data or 
gages, as the case may be. These standards are to be determined and 
mutually agreed upon between ourselves and our customers. Cus- 
tomer's requirements, of course, must be consistent with best foundry 
practice and the commercial production of their product. 

b — Our product is to be produced in accordance with the above 
mentioned standards applying to each specific piece. These standards 
are to be adhered to, it being understood that we have already, as 
specified in Paragraph 386 accepted them and agreed to work in ac- 
cordance with the same. 

c — In case of an unusual condition or a question as to the in- 
terpretation as to what standard has been established, or in case of 
a question as to whether a piece actually meets with the standard or 
not, such case shall be referred to the Inspection Committee. This 
Inspection Committee is to consist of the Service Inspector, who, on 
account of his duties, will be thoroughly familiar with the customer's 
requirements; the Superintendent, who is the man responsible for the 
product ; and the Chief Inspector, who is the man being directly re- 
sponsible for the shop inspection. 

d — The Chief Inspector's work is to be final on all matters of 
inspection, except in cases above referred to. No such case shall be 
settled definitely by either the Superintendent or the Service Inspector, 
but must always be settled in accordance with the majority vote with 
the three being present. In other words, our Chief Inspector is to be 
upheld in his decisions and ordinary routine inspection is not to be 
passed up to the Inspection Committee for settlement. 

The method described above is to further the mutual 
interests of our -customers and ourselves. The three men 
representing" the Inspection. Committee are the ones chiefly 
involved in the matter of quality. Their close co-operation 
will eventually result in keeping our standard of quality at 
the highest possible mark. 

The General Superintendent may be called in, in an ex- 
officio capacity, on matters which the majority of the In- 
spection Committee desire to have him personally investi- 
gate. 



LECTURE XXX 

RESULTS OBTAINED THROUGH THE CORRECT APPLICATION 
OF THE SCIENCE OF MANAGEMENT 

3'0-A. Effect on Production and Quality. 

30-B. Effect on Costs. 

30-C. Individual and Corporate Effect. 

This lecture, covering the above subjects, has been printed from 
the manuscript of the author's "Scientific Time Study and Differential 
Bonus" now in course of preparation. 

30-A. Effect on Production and Quality 

Before the Science of Management became more gen- 
erally understood and before there were very many widely 
separated examples of its performance, it was argued that 
the intense production claimed would result in a greatly 
inferior quality of product. Likewise the reports of greatly 
increased production were heralded as applying only to a 
few specific and unusual cases. Such reports were often 
discredited as being impossible of accomplishment. 

Today, however, the wide field that has been touched in 
the application of the methods of Scientific Management has 
enabled its exponents to cite so many cases of greatly in- 
creased production and improved quality, that a much more 
general and favorable interest in the new management has 
resulted. It is not unusual to find production increases 
running as high as iooo or 1200 per cent over the produc- 
tion formerly realized before scientific analysis, time study 
and the application of extra remuneration had been adopted. 

The extreme increases referred to have been realized in 
connection with specific operations. Some of these opera- 
tions have been operations performed purely by manual la- 
bor. Others have been machine operations. Of times these 
results have been made possible not so much through in- 
creased effort on the part of the workman, as through the 
cumulative effect of many things. The different factors 

198 



FREDERIC A. PARKHURST 1 99 

bearing- on these increased productions can be traced back- 
to the proper analysis and routing of an order, the prompt 
supplying- of requisite material, the careful predetermina- 
tion of the method, tools and equipment to be used in con- 
nection with turning out the work, and careful inspection 
and supervision during the processing of the work. On the 
other hand, many large increases have been shown where 
the elimination of false moves due to definite instructions, 
and an incentive to work to them have awakened the work- 
man to a full realization of what it is possible for him to 
accomplish when he centers his mind on the fulfillment of 
a task. 

The foregoing lectures have emphasized the importance 
of control and inspection, including the operation inspection 
at various stag-es during the processing of work. Inspection 
is just as important an item of control as are the analyses 
of the various elements entering into all of the steps neces- 
sary in performing any given piece of work. 

The true results must be measured by average perform- 
ance of departments or plants. From results within the 
author's own experience can be cited cases in which the pro- 
duction increase on bonus operations was 80% where piece 
work set by the guess-work method was supplanted by his 
additional bonus based on time study. Another plant has 
shown a production increase of 130%; another, 206%; and 
still another, 240%. 

The formula for the department and plant efficiencies, 
which formula has been described in one of the foresroine 
lectures, is based on certain plant conditions giving day work 
a value of only 50% efficiency. This is a fair representative 
figure for certain conditions. On the other hand, the value 
of the constant may vary depending on the conditions of 
the plant in which the formula is being applied. 

After standardized conditions have been established and 
an accurate record of the performance of many hundreds of 
jobs is obtainable, the wide discrepancy in the production 
increases, ranging from zero on some operations to hun- 



20.0 EFFECT ON COSTS 

dreds of per cent on other operations, simply emphasizes the 
lack of uniformity and control under ordinary management 
methods. 

The effect of this increased production, if obtained 
through proper application of the Science of Management 
methods, will tend to reduce the loss from defective work. 
The common great loss due to defective material will be 
minimized, if not eliminated, by the inspection requirements 
in regard to material before processing. The writer can cite 
cases of defective losses reduced 60%, and in one instance, 
the defective or rejected material returned from customers 
was reduced at least that amount in just one of its several 
plants. The reduction of rejections of this kind has an ap- 
preciable bearing on the service a firm is able to give its cus- 
tomers. The increased satisfaction on the part of customers 
due to more reliable product is in itself an incalculable item. 
Reliability of service is often the greatest asset a firm can 
have. It often expresses the difference between a growing 
business and one that is on the decline from lack of control, 
uniformity and reliability of product. 

30-B. Effect on Costs 

The direct labor cost reduction in. the cases mentioned 
above ranged all the way from 30% to 60% and in the case 
of the shop, formerly under piece work, the labor cost re- 
duction was about 35%. 

These reductions in cost do not take into consideration 
the added saving due to a reduction in overhead distributed 
to work, which in many cases is an important item. Of 
course the indirect labor costs to a company operating under 
the Science of Management are greater than one operating 
under the old form of management. On the other hand, 
the greatly increased production and the greatly decreased 
cost gives a net result in cost saying, sometimes running as 
high as 30 or 40 per cent. 

Speaking of reduced cost of operation, the fact must not 
be lost sight of that there is another saving that accrues to 
the added profit of a given plant or department from its 



FREDERIC A. i'ARKIIURST 201 

ability to turn out a greatly increased quantity of product. 
Coupling the increased volume with the greatly reduced 
total cost per unit, one has in the aggregate, a net return far 
in excess of anything realized before, in the majority of 
cases. 

30-C. Individual and Corporate Effect 

One of the best illustrations of the result of Scientific 
Management from the company's viewpoint is that given 
in the appendix of the text under the title "Six Years After" 
on page 321. A discussion of the performance of the Fer- 
racute Machine Company for six years' operation under the 
author's methods and after he left them, will conclude this 
course of lectures. 

Since the chapter "Six Years After" was printed (now 
over a year ago) the Company has been able to further in- 
crease its special bonus to its workmen so that now they 
are receiving not only an increased wage per hour, but also 
a quarterly service bonus amounting to 25% of the wages 
paid each man for each quarter. A copy of the service 
bonus chart is printed below. 

Service Bonus Chart, FAP 61 -A 

The satisfied staff of workmen and the continued satis- 
factory results obtained by this Company has proved the 
reliability of this form of management when properly in- 
stalled. Similar work in other plants in other lines of busi- 
ness has proved the answer in an equally satisfactory man- 
ner. The student of the Science of Management is urged 
to make personal investigations himself and see the methods 
in operation. 

SERVICE BONUS CHART FAP 61-A 

Copyright 1917 by Frederic A. Parkhurst, Organizing Engineer. 

Employees who are regular in their attendance are of 
more worth to the Company than those who are absent any 
appreciable amount of time. This BONUS CHART is 
therefore issued to sfive extra remuneration in the form of 



202 SERVICE BONUS 

SERVICE BONUS to those employees who do not absent 
themselves from work on an average of more than three 
clays for any three consecutive months, without permission 
in writing by the Company, and subject to the following 
conditions : 

(a) This bonus chart applies only to those employees who have 
executed an Employment Agreement, FAP 60A. 

(b) SERVICE BONUS will be paid only for "continuous service' 
for periods of three months each. The term ''continuous service" 
shall apply for each employee from the time he executes an Employ- 
ment Agreement, FAP 60A, and so long as such continuity of service 
has not been interrupted by absence from work of more than three 
days for any three consecutive months thereafter. If an employee 
absents himself from work for a total of more than three days for 
any such three month period, his record for "continuous service" will 
have been broken and he must make a new start on the date of hi-s 
return to work. 

(c) The continuity of service mentioned above in (b) will not be 
considered as broken if an employee is absent from work more than 
three days in any one three-month period with written permission or 
due to sickness or accident, provided such absence is supported by a 
certificate duly signed by a reputable doctor or surgeon, if required 
by company. The following SERVICE BONUS is based on normal 
hours of work of fifty-five hours per week. If business conditions 
require putting the employee on less than the fifty-five hour per week 
schedule, a pro rata service bonus will be paid under the conditions 
stated in this bonus chart. 

(d) If an employee's hourly wage . rate is changed during any 
quarterly period, his bonus for that quarter will be computed for the 
wage rate he was getting at the commencement of that quarter, and his 
service bonus for the succeeding quarter will be based on his new 
wage rate. 

(e) Employees who execute one of our Employment Agreements, 
FAP 60A on or before December 31, 1917, will participate in Service 
Bonus as per the Schedule given below in Column 2, commencing as 
of the date given below. 

(f) Employees entering our employ on or after January 1, 1918, 
or who elect to execute an Employment Agreement, FAP 60A, on or 
after January 1, 1918, will participate in Service Bonus shown below 
in Column 1 until they have completed one year of continuous em- 
ployment, after which they will automatically change to the participa- 
tion of Service Bonus in Column 2. 

(g) If an employee leaves our employ before the end of any three 
month period, he will not receive SERVICE BONUS for that period. 

(h) All earned SERVICE BONUS payments will be made con- 
currently with the wage payment to the employee on the payday next 
following the completion by the employee of a "continuous service" 
period. 



FREDERIC A. PARK HURST 



20' 



TABLE TO EXPLAIN COMPUTATION 



Hourly 
Rate 

$ .10 
.11 
.12 
.13 
.14 
.15 
.16 

.17 
.18 
.19 
.20 
.21 
.22 
.23 
.24 
.25 
.26 
.27 
.28 
.29 
.30 
.31 
.32 
.33 
.34 
.35 
.36 
.37 
.38 
.39 
.40 
.41 
.42 
.43 
.44 
.45 
.46 
.47 
.48 
.49 
.50 
.52 
.54 
.56 
.58 
.60 



Column 1 

For First Year of 

Continuous Service 

Total First 
Each Quarter Year Bonus 



OF SERVICE BONUS 

Column 2 
After First Year of 
Continuous Service 

Total Second 
ach Quarter Year Bonus 



13.75 
15.12 
16.50 
17.87 
19.25 
20.62 
22.00 
23.37 
24.75 
26.12 
27.50 
28.87 
30.25 
31.62 
33.00 
34.37 
35.75 
37.12 
38.50 
39.87 
41.25 
42.62 
44.00 
45.37 
46.75 
48.12 
49.50 
50.87 
52.25 
53.62 
55.00 
56.37 
57.75 
59.12 
60.50 
61.87 
63.25 
64.62 
66.00 
67.37 
68.75 
71.50 
74.25 
77.00 
79.75 
82.50 



$ 55.00 
60.50 
66.00 
71.50 
77.00 
82.50 
88.00 
93.50 
99.00 
104.50 
110.00 
115.50 
121.00 
126.50 
132.00 
137.50 
143.00 
148.50 
154.00 
159.50 
165.00 
170.50 
176.00 
181.50 
187.00 
192.50 
198.00 
203.50 
209.00 
214.50 
220.00 
225.50 
231.00 
236.50 
242.00 
247.50 
253.00 
258.50 
264.00 
269.50 
275.00 
286.00 
297.00 
308.00 
319.00 
330.00 



; 17.18 


$ 68.75 


18.90 


75.62 


20.62 


82.50 


22.34 


89.37 


24.06 


96.25 


25.78 


103.12 


27.50 


1 10.00 


29.21 


116.87 


30.93 


123.75 


32.65 


130.62 


34.37 


137.50 


36.09 


144.37 


37.81 


151.25 


39.53 


158.12 


41.25 


165.00 


42.96 


171.87 


44.68 


178.75 


46.40 


185.62 


48.12 


192.50 


49.84 


199.37 


51.56 


206.25 


53.28 


213.12 


55.00 


220.00 


56.71 


226.87 


58.43 


233.75 


60.15 


240.62 


61.87 


247.50 


63.59 


254.37 


65.31 


261.25 


67.03 


268.12 


68.75 


275.00 


70.46 


281.87 


72.18 


288.75 


73.90 


295.62 


75.62 


302.50 


77.34 


309.37 


79.06 


316.25 


80.78 


323.12 


82.50 


330.00 


84.21 


336.87 


85.93 


343.75 


89.37 


357.50 


92.81 


371.25 


96.25 


385.00 


99.68 


398.75 


103.12 


412.50 


Clock No 





participates in Service Bonus as per this Chart, starting with Schedule 

Column commencing 191 . . . 

FERR ACUTE MACHINE CO. 
Per 



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